EUR/USD: Likely to consolidate in a range between 1.1665 and 1.1720 - UOB Group

Sharp and swift rally appears excessive; Euro (EUR) is likely to consolidate in a range between 1.1665 and 1.1720 against US Dollar (USD). In the longer run, increase in momentum is not enough to suggest a sustained rise just yet; EUR must first close above 1.1720, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Increase in momentum is not enough to suggest a sustained rise

24-HOUR VIEW: "We did not anticipate EUR to rise sharply to a high of 1.1716 (as we had expected sideways trading). The sharp and swift rally appears to be excessive, and EUR is unlikely to rise much further. Today, instead of continuing to rise, EUR is more likely to consolidate its gains and trade between 1.1665 and 1.1720."

1-3 WEEKS VIEW: "Last Thursday (17 Jul, spot at 1.1630), we highlighted that the recent 'EUR weakness has stabilised.' We expected EUR to 'consolidate in a range of 1.1550/1.1720 for the time being.' Yesterday, Monday, EUR soared to within a few pips of 1.1720, with a high of 1.1716. Although there has been an increase in upward momentum, it is not strong enough to suggest a sustained rise just yet. EUR must close above 1.1720 before a move to 1.1765 can be expected. The chance of EUR closing above 1.1720 will remain intact as long as EUR holds above the 'strong support' level, now at 1.1620, in the next few days."