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UOB Group’s FX Strategists suggest EUR/USD could trigger further gains if 1.2010 is cleared in the next weeks.

Key Quotes

24-hour view: “We expected EUR to strengthen yesterday but we noted that ‘overbought conditions suggest that a sustained rise above 1.1985 is unlikely’. Our view was not wrong as EUR rose to 1.1987 during NY hours before trading sideways for the rest of the session. While conditions remain overbought, the risk is still on the upside. That said, any further advance in EUR is expected to face solid resistance at 1.2010. On the downside, a break of 1.1945 (minor support is at 1.1960) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (14 Apr, spot at 1.1950). As highlighted, ‘improved momentum is likely to lead to further EUR strength and the next major resistance is at 1.2010’. Overbought shorter-term conditions could slow the pace of advance but a break of 1.2010 would not be surprising. The next resistance is at 1.2065. On the downside, a breach of 1.1915 (‘strong support’ level was at 1.1875 yesterday) would indicate that the EUR strength that started earlier last week (see annotations in the chart below) has run its course.”