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Following the recent price action, EUR/USD could now attempt a test of the 1.1050 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday the recent “consolidation phase appears to be close to ending” and added, “a break of the strong 1.1000 level could lead to a rapid rise to 1.1025″. EUR subsequently surged to a 3-week high of 1.1034 before easing off. Upward momentum appears to be over-extended and further EUR strength is unlikely for today. EUR is more likely to consolidate its gains and trade sideways at these higher levels, expected to be between 1.0980 and 1.1030″.

Next 1-3 weeks: “While we expected EUR to trade sideways within a 1.0890/1.1025 range since last Thursday (03 Oct, spot at 1.0960), we intimated on Monday (07 Oct, spot at 1.0980) that the “top of the range appears to be more vulnerable”. After several attempts, EUR finally managed to crack the ‘stubborn’ 1.1000 level and hit a high of 1.1034 yesterday (10 Oct). Despite the relatively strong advance, upward momentum has not improved by much. That said, there is room for EUR to test the 1.1050 level. This is a strong resistance and may not be easy to crack. Looking ahead, if EUR were to register a NY closing above 1.1050, further gains towards last month’s top near 1.1110 would not be surprising. Support is at 1.0980 but only a breach of 1.0955 (‘strong support’ level) would indicate that the current upward pressure has eased”.