EUR/USD: Door open for extra gains – UOB

FX Strategists at UOB Group see EUR/USD advancing to the area above 1.1800 in the next weeks.

Key Quotes

24-hour view: “Our expectation for EUR ‘to continue to strengthen was incorrect’ as it dipped to a low of 1.1697 before closing lower for the first time in seven days (1.1714, -0.31%). Upward momentum has diminished considerably and the current movement is viewed as part of a consolidation phase. For today, EUR is likely to trade sideways between 1.1685 and 1.1760.”

Next 1-3 weeks: “We noted yesterday (27 Jul, spot at 1.1685) that ‘the price action clearly indicates that EUR is still strong’ and added, ‘the next level to focus on is at 1.1750 followed by 1.1830’. EUR cracked 1.1750 without much difficulty as it soared to 1.1781 before closing on a strong note at 1.1751 (+0.83%). Severely overbought shorter-term conditions suggest the positive phase that started about 1-1/2 weeks ago could be taking a breather soon. That said, only a break of 1.1630 (‘strong support’ level was at 1.1540 yesterday) would indicate the current strong upward pressure has eased. Until then, EUR could continue to advance towards 1.1830. The next resistance level of note above 1.1830 is at 1.1950.”