EUR/USD diminished odds for a test of 1.2200 – UOB

FX Strategists at UOB Group noted a probable visit to the 1.2200 area in the near term appears to have lost some momentum for the time being.

Key Quotes

24-hour view: “We expected EUR to extend its gains yesterday but were of the view that 1.2385 would offer “solid resistance”. EUR edged briefly above this strong resistance before easing off quickly (high has been 1.2388). The rapid pull-back indicates that the recent upward pressure has eased and the current movement is viewed as part of a consolidation phase. In other words, we expect EUR to trade sideways from here, likely within a 1.2270/1.2370 range”.

Next 1-3 weeks: “EUR edged briefly above the key 1.2385 resistance yesterday but eased off quickly after touching a high of 1.2383. Despite the breach of the strong resistance, we continue to see chance for a test of the strong 1.2200 support in the coming days. That said, the prospect for such a move has diminished considerably and would continue to decrease unless EUR can move and stay below 1.2270 within these 1 to 2 days. A clear break above 1.2380/85 would indicate that EUR has moved into a consolidation phase, albeit likely at a slightly higher range (we do not expect EUR to move into a bullish phase for now)”.