Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note the upside momentum in EUR/USD appears to be losing some traction.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the price actions appear to be part of a consolidation phase’ and we expected EUR to ‘trade sideways between 1.0780 and 1.0870’. EUR subsequently traded within a range of 1.0800/1.0873 before closing at 1.0816 (-0.11%). The price actions still appear to be consolidative and we continue to expect EUR to trade sideways, likely between 1.0790 and 1.0860.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (16 Jan, spot at 1.0825). As highlighted, upward momentum is easing and a break of 1.0760 (no change in ‘strong support’ level) would indicate that EUR could consolidate first before making another attempt to advance toward the resistance at 1.0900 later on.”