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In opinion of FX Strategists at UOB Group, the upside momentum in EUR/USD could extend to the 1.1200 neighbourhood in the next weeks.

Key Quotes

24-hour view: “While we expected EUR to strengthen last Friday, we held the view “the major 1.1165 resistance level is likely out of reach”. The subsequent advance in EUR exceeded our expectation of it rose to 1.1172 before closing on a strong note at 1.1169 (+0.42%). The rally is deep in overbought territory and further sustained gain is not likely for today. EUR is more likely to consolidate and trade sideways, expected to be within a 1.1130/1.1180 range”.

Next 1-3 weeks: “We maintain our positive outlook for EUR and highlighted last Friday (18 Oct, spot at 1.1120) that “the focus is firmly at the 1.1165 resistance now”. EUR subsequently rose to 1.1172 before ending the day (and the week) on a strong note (NY close of 1.1169, +0.42%). The current EUR rally still appears ‘healthy’ and a move above 1.1200 would not be surprising but 1.1250 is a much stronger resistance and may not yield as easily. On the downside, only a break of 1.1070 (‘strong support’ level slightly higher than 1.1050 previously) would indicate that the current positive phase in EUR that started more than a week ago has run its course”.