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FX Strategists at UOB Group keep the positive view on EUR/USD, although they expect the 1.1230 level to be a tough hurdle.

Key Quotes

24-hour view: “While we noted yesterday that ‘downward momentum has not improved by much’ and last Friday’s 1.1123 low is likely ‘safe’, we were of the view that it is ‘too early to expect a recovery’. However, instead of consolidating, EUR rebounded to a high of 1.1206 before ending the day on a firm note at 1.1195. The recovery lacks momentum but there is room for EUR to edge higher from here. That said, the strong 1.1230 resistance is unlikely to come under threat. On the downside, only a breach of 1.1155 (minor support at 1.1175) would indicate the current mild upward pressure has eased.”

Next 1-3 weeks: “As highlighted, the movement in EUR is likely the ‘early stages of a corrective pullback’ but any weakness is viewed as part of a broad 1.1110/1.1230 range and a sustained decline below 1.1110 appears unlikely. The subsequent short-lived dip in EUR to 1.1123 last Friday and the rapid recovery reinforces our view. The 1.1110 level is a relatively strong support and a clear break of this level would suggest that last week’s peak at 1.1239 could be a more significant top than currently expected.”