In opinion of FX Strategists at UOB Group, EUR/USD could advance further and attempt a visit to the YTD peaks near 1.1500 in the next weeks.
Key Quotes
24-hour view: “Yesterday, we expected EUR to strengthen but held the view that ‘1.1460 could be just out of reach’. Our view was not wrong as EUR touched 1.1451 before dropping back down. Upward momentum has eased and the 1.1451 high is likely an interim top. For today, EUR is likely to consolidate and trade between 1.1380 and 1.1445.”
Next 1-3 weeks: “While we noted yesterday (14 Jul, spot at 1.1345) that ‘if EUR closes above 1.1380 within these few days, a break of the June’s peak of 1.1422 would not be surprising’, we held the view that ‘the prospect for such a scenario is not high’. However, EUR soared to a high of 1.1408, closed on a strong note at 1.1396 (up by +0.49%) before extending its advance after NY close. Rapid pick-up in momentum suggests EUR could continue to advance towards the year-to-date high at 1.1492 even though the current momentum may not be enough to carry EUR above this major level. Overall, EUR is expected to trade with a positive note as long as it does not move below 1.1320 (‘strong support’ level).”
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