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According to FX Strategists at UOB Group, EUR/USD now faces the next hurdle at 1.2360 ahead of 1.2400.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘appears poised to move above 1.2309 but it is left to be seen if it can move clearly above 1.2330’. EUR subsequently rose to 1.2349, plummeted to 1.2264 during NY hours before rebounding strongly to close at 1.2325 (+0.25%). Upward momentum is building up and EUR is expected to head higher towards 1.2360. A move above this level is not ruled but the next resistance at 1.2400 is likely out of reach for now. Support is at 1.2300 followed by 1.2270. The latter level is acting as a solid support now.”

Next 1-3 weeks: “Yesterday (06 Jan, spot at 1.2295), we indicated that ‘prospect for a sustained move above 1.2309 has increased’ and ‘a clear break of 1.2309 would shift the focus to 1.2330 followed by 1.2360’. EUR rose to 1.2349 before closing on a firm note at 1.2325 (+0.25%). The 1.2360 level appears to be within reach and the next resistance above this level is at 1.2400. The current positive outlook for EUR is deemed as intact as long as it does not move below 1.2240 (‘strong support’ level previously at 1.2200).”