In opinion of FX Strategists at UOB Group, there is rising bets for EUR/USD to move beyond the 1.1830 level in the near-term.
Key Quotes
24-hour view: “We expected EUR to “trade sideways” yesterday but it surged to a high of 1.1805 before ending the day on a strong note at 1.1790 (+0.65%). While upward momentum has improved, this is counteracted by the still rather overbought conditions. Overall, there is room for further EUR strength but any advance could be limited to a test of the major resistance at 1.1830. For today, the odds for extension to 1.1880 are not high. Support is at 1.1745 followed by 1.1710.”
Next 1-3 weeks: “There is not much to add to our update from Tuesday (28 Jul, spot at 1.1765). As highlighted, EUR “could continue to advance to 1.1830 and the next resistance level of note is at 1.1950”. That said, upward momentum is beginning to show early sign of ‘tiring’ and this coupled with the still overbought conditions suggests that the rally that started about 2 weeks ago (see annotations in the chart below) could be taking a breather soon. However, only a breach of 1.1680 (‘strong support’ level was previously at 1.1630) would indicate that the rally in EUR is ready to take a break. To look at it another way, while EUR could move above 1.1830, the next major resistance at 1.1950 could be out of reach this time round.”
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