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Further gains in EUR/USD are likely on a breakout of the 1.1380 level, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We detected the improved underlying tone yesterday and held the view that EUR ‘could edge higher but any advance is viewed as part of a 1.1225/1.1275 range’. The subsequent rapid improvement in momentum came as a surprise as EUR surged to an overnight high of 1.1345. While overbought, the rally appears to have enough momentum to test the strong resistance at 1.1380. For today, the prospect for a sustained advance above this level is not high. Overall, only a breach of 1.1280 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “EUR closed on a relatively strong note yesterday (1.1308, +0.53%) and upward momentum is beginning to pick up. However, it appears to be too early to expect a sustained advance. EUR has to close above the top of our expected sideway-trading range of 1.1170/1.1380 in order to indicate that it is ready to move to last month’s peak at 1.1422. At this stage, the prospect for such a move is not high but it would continue to increase as long as EUR does not move below 1.1240 within these few days.”