FX Strategists at UOB Group noted EUR/USD’s momentum remains positive but a move to 1.19 is out of favour for the time being.
Key Quotes
24-hour view: “We highlighted yesterday that ‘there is room for EUR to stage another push higher to 1.1865’. We added, ‘a break of the major resistance at 1.1900 is unlikely’. Our view was not wrong as EUR eased off after touching a high of 1.1880. Upward momentum is showing sign of slowing and this coupled with overbought conditions suggests that further EUR strength is unlikely for today. However, it appears to be too early to expect a sustained pull-back. Overall, EUR is more likely to consolidate and trade within a 1.1820/1.1885 range (a sustained decline below 1.1820 is unlikely).”
Next 1-3 weeks: “There is not much to add to our update from yesterday (21 Oct, spot at 1.1825). As highlighted, upward momentum is beginning to improve and the bias for EUR is tilted to the upside. That said, in view of the nascent build-up in momentum, the major resistance at 1.1900 may not come into the picture so soon (next resistance is at 1.1940). The current mild upward pressure is deemed as intact as long as EUR does not move below 1.1770 (‘strong support’ level was at 1.1745 yesterday).”
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