EUR/USD: Short-term top in place? – UOB

FX Strategists at UOB Group suggested EUR/USD could have charted a short-term top around 1.1420.

Key Quotes

24-hour view: “Our view for EUR to strengthen yesterday was wrong as it plummeted and took out a couple of strong support levels with ease. From here, EUR could weaken further to 1.1240. For today, the next support at 1.1200 is unlikely to come into the picture. Resistance is at 1.1310 followed by 1.1330.”

Next 1-3 weeks: “We noted yesterday (11 Jun, spot at 1.1375) that the break of the major 1.1390 resistance level “lacks spark and upward momentum has not improved by all that much”. That said, we did not anticipate the relatively sharp decline in EUR that sent it to a low of 1.1286. While our ‘strong support’ level at 1.1270 is still intact, the positive phase in EUR that started more than 3 weeks ago is deemed to have run its course. In other words, the 1.1422 high posted on Wednesday (10 Jun) is a short-term top. While EUR is expected to trade below this top from here, any weakness is viewed as part of a 1.1170/1.1380 consolidation range for now.”