Title: EUR/USD: Still scope for a test of 1.0300 – UOB

Jul 22, 2022 05:48AM ET

By: AnalysisWatch

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang still sees EUR/USD with chances of revisit the 1.0300 hurdle in the next few weeks.

Yesterday, we expected EUR to ‘trade sideways within a range of 1.0135/1.0235’. During London hours, EUR swung wildly between 1.0152 and 1.0278 before ending the day at 1.0228 (+0.50%). The volatile price actions have resulted in a mixed outlook. Further choppy movement is not ruled out, albeit likely within a narrower range of 1.0170/1.0275.

Next 1-3 weeks: “We continue to hold the same view as from yesterday.

As highlighted, upward momentum has waned somewhat but there is still room for EUR to rise to 1.0300.

At this stage, the chance for a sustained rise above this level is not high. On the downside, a breach of 1.0135 (‘strong support’ level was at 1.0115 yesterday) would indicate that the advance in EUR that started earlier this week has come to an end.

EURUSD price reverses the European Central Bank (ECB) inspired gains as it remains pressured around the intraday low of 1.0190 heading into Friday’s European session. In doing so, the major currency pair stays inside the immediate trading range while preparing to snap the three-week downtrend.

Although the ECB’s heavy rate hike and the Transmission Protection Instrument (TPI) weighed on the Treasury yields and the US dollar, the market’s reassessment of the risk catalysts calls back the EURUSD bears as they await key activity data from Eurozone and the US for July.