EUR/USD: the euro has probably entered a short-term consolidation phase (UOB)

UOB analysis of the EUR/USD pair.

Intraday analysis

After last Thursday's relatively sharp drop, the EUR/USD consolidated and traded sideways on Friday. Price action is considered as an ongoing consolidation phase. In other words, the EUR is expected to continue to move sideways, probably between 1.1225 and 1.1270.

Short-term analysis

Last Thursday's relatively sharp drop (18 April) broke our "key support" at 1.1255 (low at 1.1224). As previously noted, a break in the "key support" would indicate that the upward pressure that began on 4 April has eased (we had previously estimated that a NY close above 1.1330 would suggest that the euro is ready to move on to 1.1400). 1.1330 remains a major resistance level and for about the coming week, it is unlikely that the euro will pass above this level. That being said, it is too early to expect a sustained decline. It seems more likely that the euro has entered a "consolidation phase" and could move laterally for a few weeks, within a range between 1,1200/1,1300.