EUR/USD outlook shifted to neutral from bearish – UOB

The outlook on the pair shifted to neutral from bullish, noted FX Strategists at UOB Group.

Key Quotes

“We shifted from a bullish to neutral stance yesterday, 29 May and the move was timely as EUR dropped sharply after NY close to take out the strong 1.1130 support (low of 1.1125 at the time of writing)”.

“While we indicated that “the immediate bias is for a probe lower towards the bottom of the expected 1.1100/1.1250 consolidation range”, the rapid pace of pullback coupled with the vastly improved downward momentum suggests that a move below 1.1100 would not be surprising”.

“To put it another way, instead of expecting a 1.1100/1.1250 consolidation range, we now expect a deeper pullback towards 1.1025, the minor peak seen earlier this month as well as rising trend-line support”.

“At this stage, a sustained move below this level is not expected. Overall, the current downward pressure would continue to increase unless EUR can move and stay above 1.1190 within these few days”.