EUR/USD keeps the range bound theme unchanged – UOB

Further consolidation in EUR/USD appears on the cards for the time being, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: Yesterday, we held the view that “there is room for EUR to edge lower, but any decline is unlikely to break clearly below 1.0560.” Our view was not wrong, as EUR dipped to a low of 1.0563 in late NY trade. While downward momentum has not increased much, the bias for today is still tilted to the downside. However, today, any decline is unlikely to reach the major support at 1.0510. Note that there is another support at 1.0535. Resistance is at 1.0585, followed by 1.0605. 

Next 1-3 weeks: We continue to hold the same view as yesterday (25 Oct, spot at 1.0595), wherein EUR is likely to trade in a range of 1.0510/1.0690 for now. While the underlying tone has weakened somewhat, EUR has to break below the major support at 1.0510 before a sustained decline is likely. At this stage, the likelihood of EUR breaking clearly below 1.0510 is not high.