EUR/USD faces strong resistance at 1.2425 – UOB

In view of FX Strategists at UOB Group, the pair faces a tough resistance at 1.2425 in the near term.

Key Quotes

24-hour view: “We expected a higher EUR yesterday but noted that “it would be surprising if EUR can maintain a toehold above 1.2400”. EUR attempted but failed to break 1.2400 and eased off quickly from a high of 1.2395. Upward momentum has clearly waned but it is too early to expect a significant pull-back. EUR is more likely to consolidate its recent gains and trade sideways at these higher levels. Expected range for today; 1.2330/1.2395”.

Next 1-3 weeks: “While we noted yesterday that the “weak undertone is stabilizing”, the continuing EUR strength that easily took out the strong 1.2350 resistance was not exactly expected. The subsequent strong daily close in NY has shifted the immediate pressure to the upside but at this stage, we are not anticipating a sustained move above last month’s top near 1.2475. On a shorter-term note, 1.2425 is already quite a formidable level. Overall, we expect EUR to stay underpinned from here as long as the ‘key support’ at 1.2280 is intact”.