In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, EUR/USD appears to have now embarked on a consolidative phase.

Key Quotes

24-hour view: “We expected EUR to ‘trade sideways within a range of 1.0840/1.0900’ yesterday. EUR popped briefly to a high of 1.0913 before dropping to a low of 1.0837. Downward momentum has improved somewhat and EUR is likely to trade with a downward bias today. As downward momentum is not strong, EUR is unlikely to challenge the major support at 1.0800 (minor support is at 1.0820). Resistance is at 1.0875, a breach of 1.0895 would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “Yesterday (30 Jan, spot at 1.0870), we highlighted that EUR appears to have entered a consolidation phase and it is likely to trade between 1.0800 and 1.0930 for the time being. We continue to hold the same view. Looking ahead, if EUR breaks below 1.0800, it could lead to a pullback toward the next major support at 1.0720.”