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UOB Group’s FX Strategists noted EUR/USD could now attempt to visit the 1.2200 level in the next weeks.

Key Quotes

24-hour view: “Our expectation for EUR to consolidate was wrong as it staged a sudden and sharp rally and cracked the major resistance at 1.2011 (high in Sep). The breach of the key resistance resulted in rapid surge to a high of 1.2076. While the sharp rally is overbought, robust momentum suggests further EUR strength is likely. The next resistance is at 1.2100 followed by 1.2130. On the downside, the ‘break-out’ level near 1.2010 is acting as a solid support now (minor support is at 1.2035).”

Next 1-3 weeks: ”After EUR failed to break the key 1.2011 level and retreated sharply from high of 1.2003, we indicated yesterday (01 Dec, spot at 1.1935) that ‘odds for further EUR strength have diminished unless EUR can move and stay above 1.1980 within these 1 to 2 days’. That said, we did quite expect the manner by which EUR turned around, blast past 1.2011 and rocketed to a high of 1.2076, Note that EUR closed up by a whopping +1.19% (1.2070), its biggest 1-day gain since March. The clear break-out indicates that EUR has moved into its next up-leg. Further EUR strength is likely especially when there are few resistance levels of note. From here, the level to focus on is at 1.2200. On the downside, the ‘strong support’ has moved higher to 1.1950 from the previous level of 1.1900. On a shorter-term note, the ‘break-out’ level near 1.2010 is already a solid support.”