EUR/USD sticks to the neutral outlook – UOB

FX Strategists at UOB Group noted the pair could slip back further in the next weeks.

Key Quote

24-hour view: “The solid support highlighted at 1.2235 yesterday was unchallenged as EUR recovered from a low of 1.2255 and traded mostly sideways. The recent downward pressure is easing and while a retest of 1.2255 would not be surprising, any weakness is viewed as part of a 1.2255/1.2315 consolidation range. In other words, EUR is expected to trade sideways for now”.

Next 1-3 weeks: “We have held a neutral stance for about a month now and since then; EUR has been trading within a relatively narrow 1.2237/1.2476 range. That said, shorter-term price action has been erratic and the outlook remains mixed. However, EUR closed on a soft note in NY yesterday and the weakened undertone increases the risk of a move below the previously expected 1.2235/1.2475 consolidation range. While a dip below 1.2235 would not be surprising, the 1.2153 low seen in early March is another major support and based on the current lackluster momentum, any weakness is expected to encounter solid support near this level. Overall, EUR is expected to stay under mild downward pressure from here unless it can move back above 1.2420”.