United Overseas Bank’s (UOB) Quek Ser Leang highlights EUR/USD’s failure to extend its recent advance, with momentum fading after a retreat from recent highs. The pair is now seen oscillating between 1.1360 and 1.1450 in coming weeks, while intraday price action may test 1.1390 without threatening the more important 1.1360 support unless the 1.1430 resistance breaks.

Momentum fades into sideways pattern

"24-HOUR VIEW: Two days ago, EUR traded within a range of 1.1408/1.1444 and closed largely unchanged at 1.1440 (+0.04%). Yesterday, we stated that we “continue to expect range-trading, but the firmer underlying tone suggests EUR is likely to trade in a higher range of 1.1425/1.1470.” Our assessments turned out to be incorrect, as EUR fell to a low of 1.1407. Despite the relatively sharp decline, downward momentum has not increased much. However, there is scope for EUR to dip below 1.1390. The major support at 1.1360 is unlikely to come into view. Resistance is at 1.1420; a breach of 1.1430 would indicate that the immediate downward pressure has eased."

"1-3 WEEKS VIEW: Our most recent narrative was from last Friday (03 Jul, spot at 1.1430), when we highlighted that “the bias for EUR is tilted to the upside.” We also highlighted that “expect firm resistance at 1.1470 and 1.1500.” EUR has not been able to make much headway on the upside, and yesterday, it retreated to a low of 1.1407. Although our ‘strong support’ level at 1.1390 has not been breached yet, upward momentum has largely faded. EUR has likely moved back into a range-trading phase, and we expect it to trade between 1.1360 and 1.1450 for now."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)