EUR/USD is now focused on 1.1050 – UOB

In view of FX Strategists at UOB Group, if EUR/USD closes above 1.1050 on a daily basis, it could then attempt a move towards 1.11 and above.

Key Quotes

24-hour view: “EUR traded between 1.1011 and 1.1048 yesterday, narrower than our expected sideway-trading range of 1.0990/1.1050. The price action is still viewed as part of a consolidation phase and EUR is expected to continue to trade sideways for today, likely within a 1.1000 and 1.1050 range”.

Next 1-3 weeks: “After two straight days of strong gains, EUR traded sideways and registered an ‘inside day’. The price action was not exactly surprising as we indicated yesterday (14 Oct, spot at 1.1025) that “shorter-term indicators are overbought and from here, we will ‘upgrade’ the current positive call for EUR further only if it can close above 1.1050″. The odds for a NY closing above 1.1050 still appears to be better than even but EUR could ill afford to dither around current levels as a prolonged consolidation amidst the current overbought conditions would quickly increase the risk of a short-term top. In other words, EUR has to move clearly above 1.1050 within these 1 to 2 days or a break of 1.0970 (no change in ‘strong support’ level) would not be surprising. Looking ahead, a break of 1.0970 would indicate that EUR has moved back into a consolidation phase”.