EUR/USD back to neutral from bullish – UOB

FX Strategists at UOB Group have shifted their outlook to neutral from bullish in the near term, allowing a test of the 1.1680 region in the next weeks.

Key Quotes

24-hour view: “The sharp decline in EUR was unexpected and indicates that a short-term top is in place. However, the drop appears to be running ahead of itself and further sustained down-move is not expected for today. EUR is more likely to consolidate its loss and trade sideways at these lower levels, expected to be between 1.1740 and 1.1810”.

Next 1-3 weeks: “The sharp decline in EUR took out the stop-loss for our bearish view at 1.1770 last Friday and this signals that the bullish phase that started on 19 Jul has ended. The immediate pressure has clearly shifted to the downside even though it is too early to expect a major bearish reversal. EUR has likely moved into a correction/consolidation phase but the immediate bias is for a probe lower towards the bottom of the expected 1.1680/1.1880 consolidation range. On a shorter-note, 1.1840 is already a strong resistance ahead of 1.1880”.