In opinion of FX Strategists at UOB Group, spot could advance to the 1.1670 area and beyond in the near term.
Key Quotes
24-hour view: “Expectation for a dip below 1.1500 was wrong as EUR staged a surprisingly strong up-move from a low of 1.1531 (high of 1.1639 during NY hours last Friday). There is scope for EUR to extend higher to 1.1670 but overbought conditions suggest that a move beyond 1.1700 is not expected, at least not for today. On the downside, a break of 1.1580 is enough to indicate that a short-term top is in place”.
Next 1-3 weeks: “We have held the same view since last Tuesday wherein the robust recovery in EUR has chance to test the major 1.1630 resistance. After a few days of choppy price action, EUR finally reached this resistance as it hit a high of 1.1639 last Friday. As highlighted, the next resistance above 1.1630 is at 1.1670 and while the probability for a clear break of this level is still not high, it has improved considerably. A NY closing above 1.1670 would suggest that EUR is ready to tackle the major resistance at 1.1745/50. On the downside, only a break of the ‘key support’ at 1.1545 (level previously at 1.1470) would indicate that the current upward pressure has eased”.
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