Euro (EUR) is likely to consolidate within a range of 1.1655/1.1720. In the longer run, risk for EUR remains on the upside; the probability of it breaking above 1.1805 is not high for now, UOB Group's FX analysts Quek Ser Leang and Lee Sue Ann note.

Risk for EUR remains on the upside

24-HOUR VIEW: "Following the strong surge in USD on Tuesday, we indicated yesterday that 'the sharp rise seems excessive, and instead of continuing to rise, EUR is more likely to consolidate today, probably between 1.1690 and 1.1770'. The subsequent price movements did not unfold as expected. During the NY session, EUR rose to 1.1742 and then fell to 1.1676. EUR closed at 1.1682, down by 0.36%. Today, we continue to expect consolidation, but the softer underlying tone suggests a lower range of 1.1655/1.1720."

1-3 WEEKS VIEW: "We stated yesterday that 'while the sharp rally seems overextended, there is scope for EUR to continue to rise'. However, we pointed out that 'the probability of it breaking above 1.1805, near last month’s high, is not high for now'. We also pointed out that 'the risk for EUR remains on the upside, provided that it does not break below 1.1560 (‘strong support’ level)'. We continue to hold the same view, but we are revising the ‘strong support’ level higher to 1.1625."