Euro: Range phase after failed upside break against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann noted that EUR/USD briefly surged to 1.1562 following the US CPI release, before subsequently falling back to 1.1524. The analysts now believe that the upward momentum has waned, and the pair is likely to range trade between 1.1480 and 1.1580 over the next 1-3 weeks.

Prior to this, EUR had been trading quietly over the previous two days, closing largely unchanged at 1.1540. The analysts had previously stated that they expect EUR to trade within the 1.1530-1.1560 range, but subsequent price movements did not materialize as anticipated. EUR did spike to 1.1562 during the New York session, only to retreat slightly to 1.1524, a 0.14% decline.

While further pullback is not entirely ruled out, any decline is expected to remain within the 1.1510-1.1545 range. Two days ago, UOB highlighted that the hurdle for further gains had risen, and EUR would need to close above 1.1580 before any move to 1.1600 or beyond could be expected. Although EUR briefly rose to 1.1562, it subsequently retreated to a low of 1.1519, with the strong support level at 1.1515 yet to be breached.

Despite this, the analysts still anticipate that EUR will remain within a 1.1480/1.1580 range for now.