EUR/USD strong contention seen at 1.2220 – UOB

FX Strategists at UOB Group remain neutral on spot while noted the tough support in the 1.2220 region.

Key Quotes

24-hour view: “The anticipated ‘down-leg’ towards 1.2260 did not materialize as EUR rebounded after briefly touching 1.2271. The recent downward pressure has eased considerably and EUR is deemed to have moved into a consolidation phase. In other words, we expect EUR to trade sideways for now, likely within a 1.2285/1.2355 range”.

Next 1-3 weeks: “EUR hit a ‘fresh’ low of 1.2271 last Friday but rebounded to close almost unchanged for the day. We continue to hold the view that the immediate pressure is on the downside even though ‘neutral’ shorter-term indicators suggest that EUR could trade sideways for a few days first before moving lower to test the solid support at 1.2220. At this stage, a sustained move below this level seems unlikely. Resistance is at 1.2370 but only a move above 1.2420 would indicate that the current mild downward pressure has eased”.