EUR/USD: short-term risks remain to the upside for the euro (UOB)

UOB analysis of the EUR/USD.

Intraday analysis

We pointed out on Wednesday that "the EUR/USD increase may first of all test 1.1385 before falling back". The 1.1385 level was not tested, as the EUR fell after hitting 1.1372 at the end of that day in New York. While upward pressures have eased with the decline from the high, it is too early to expect a sustained decline. However, it is possible that the euro may fall slightly, but any weakness is considered part of the consolidation range at 1.1310/1.1370 (a sustained decline below 1.1300 is not expected).

Short-term analysis

There is not much to add to Wednesday's update (21 February, 1.1345). As pointed out, the immediate risk for the EUR/USD is on the upside, but the sluggish momentum suggests that it is too early to expect a sustained rise. In other words, even if we continue to think that the euro could continue to progress, we expect that any advance will hardly exceed 1.1440. In the short term, 1.1410 already represents a fairly solid level. On the downside, the EUR would have to tumble below 1.1270 to indicate that the current slight upward pressure has eased.