EUR/USD: Likely to trade between 1.1480 and 1.1660 – UOB Group

Sharp rally may extend further; overbought conditions suggest Euro (EUR) is unlikely to break clearly above 1.1620. In the longer run, EUR is expected to continue to trade in a range; given the increase in volatility, it is now likely to trade between 1.1480 and 1.1660, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

EUR is expected to continue to trade in a range

24-HOUR VIEW: “We stated yesterday that ‘there is a chance for EUR to test 1.1445.’ We also stated that ‘the major support at 1.1400 is unlikely to come under threat.’ While EUR dropped to a low of 1.1451 in the London session, it then rallied sharply to 1.1581. EUR continues to rise in the early Asian session today. The sharp rally may extend further, but deeply overbought conditions suggest EUR is unlikely to break clearly above 1.1620. On the downside, if EUR breaks below 1.1535 (minor support is at 1.1560), it would indicate that the rally is ready to take a breather.”

1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (19 Jun, spot at 1.1475), we highlighted that EUR ‘is likely to trade in a range for now, probably between 1.1400 and 1.1570.’ Yesterday, EUR fluctuated in a broad range between 1.1451 and 1.1581. While EUR has moved above 1.1570, there has been no significant increase in upward momentum. For the time being, we continue to expect range trading, but given the increase in volatility, we now expect EUR to trade in a range of 1.1480/1.1660.”

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