Euro (EUR) could pull back further against US Dollar (USD), but any decline is likely part of a lower range of 1.1715/1.1775. In the longer run, price action indicates further EUR strength, likely toward 1.1795, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action indicates further EUR strength

24-HOUR VIEW: "EUR rose to a high of 1.1775 two days ago. Yesterday, we indicated that “while negative divergence is starting to form, EUR could edge above the 1.1795 level before a pullback can be expected.” However, EUR rose less than expected to a high of 1.1788 before pulling back. Negative divergence remains apparent, this, combined with slowing momentum, indicates EUR could pull back further. However, any decline is likely part of a lower range of 1.1715/1.1775."

1-3 WEEKS VIEW: "Two days ago (23 Jul, spot at 1.1740), we highlighted that the recent price action “indicates further EUR strength, likely toward 1.1795.” After EUR rose to 1.1775, we noted yesterday that “looking ahead, a clear break above 1.1795 will shift the focus to 1.1830.” EUR subsequently rose to 1.1788 and then closed lower for the first time in four days (1.1754, -0.14%). While short-term upward momentum has slowed somewhat, we will maintain our view as long as 1.1690 (no change in ‘strong support’ level) is not breached."