In opinion of FX Strategists at UOB Group, the prospects for further gains in EUR/USD now appear somewhat diminished.

Key Quotes

24-hour view: “We expected EUR to ‘trade sideways between 1.1390 and1.1445’ yesterday. Our view for sideway-trading was not wrong even though EUR traded within a narrower range than expected (1.1390/1.1434). The quiet price actions offer no fresh clues and EUR could continue to trade sideways for today, likely between 1.1395 and 1.1440.”

Next 1-3 weeks: “Our view from yesterday (17 Jan, spot at 1.1410) still stands. As highlighted, upward momentum is beginning to wane and a break of 1.1390 (no change in ‘strong support’ level) would indicate that the positive phase in EUR that started in the middle of last week is unlikely to extend to 1.1515. Note that the ‘strong support’ level was tested during NY session but was not clearly breached (low of 1.1390). Looking ahead, a clear break of 1.1390 would indicate that EUR could consolidate and trade sideways.”