FX Strategists at UOB Group believe EUR/USD could attempt a test of the area above the 1.1800 barrier.
24-hour view: “Our expectation for EUR to ‘test the next resistance at 1.1775’ was wrong as it dropped to a low of 1.1683 before rebounding quickly. The choppy price actions have resulted in a mixed outlook. That said, the underlying tone still appears to be a tad positive and this would likely translate into a higher trading range of 1.1690/1.1765.”
Next 1-3 weeks: “The break of our ‘strong resistance’ level at 1.1720 yesterday (high of 1.1745) indicates that the negative phase in EUR that started about 2 weeks ago has run its course. In other words, last Friday’s (25 Sep) low of 1.1611 was the extent of the EUR weak phase (in our latest narrative, we held the view that EUR could dip below 1.1600 but 1.1565 is expected to offer formidable support). The current movement is viewed as the early stages of consolidation even though the improved shorter-term momentum suggests that EUR is likely to probe the top of the expected consolidation range of 1.1630/1.1830 first. At this stage, the prospect for a sustained advance above 1.1830 is not high.”