EUR/USD: Likely to trade between 1.1580 and 1.1680 - UOB Group

Euro (EUR) is likely to trade between 1.1580 and 1.1680 against US Dollar (USD). In the longer run, EUR weakness appears to have stabilised; for the time being it is likely to consolidate in a range of 1.1550/1.1720, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

EUR weakness appears to have stabilised

24-HOUR VIEW: "EUR plummeted to a low of 1.1590 two days ago. Yesterday, we stated that 'the sharp drop appears overdone, and EUR is unlikely to weaken much further.' We expected EUR to 'consolidate in a range of 1.1580/1.1650.' Instead of consolidating, EUR swung wildly between 1.1561 and 1.1721 before settling at 1.1634 (+0.30%). Barring any unexpected developments, EUR is likely to trade with reduced volatility today, expected to be between 1.1580 and 1.1680."

1-3 WEEKS VIEW: "We have viewed EUR negatively since early last week. Yesterday (16 Jul, spot at 1.1610), we indicated that the recent "the price action continues to suggest downside risk in EUR, and the next level to monitor is 1.1550." We added, "only a breach of 1.1705 ('strong resistance' level) would indicate that the weakness has stabilised. EUR briefly spiked above 1.1705 in the NY session (high of 1.1721) before dropping back down to close at 1.1634 (+0.30%). The EUR weakness appears to have stabilised, and for the time being, it is likely to consolidate in a range of 1.1550/1.1720. That said, after this phase of consolidation, a move below the range appears more likely than a break above."