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FX Strategists at UOB Group now believe EUR/USD could extend the move up to the 1.1096 level and probably 1.1170 in the next weeks.

Key Quotes

24-hour view: “Our view for EUR last Friday was for it to ‘advance at a slower pace towards 1.1040’. EUR rose to 1.1053, dropped back to 1.0949 before swinging back higher again. Despite the overall choppy price actions, the underlying tone remains firm and the risk for today is tilted to the upside. However, the late January peak of 1.1096 is a solid resistance and for today, the prospect for a break of this level is not high. Support is at 1.1010 followed by 1.0980.”

Next 1-3 weeks: “We expected EUR to strengthen since last Wednesday (26 Feb, spot at 1.0875) and after it surged on Thursday, we indicated on Friday (28 Feb, spot at 1.0995) that ‘it is left to be seen if EUR possesses enough momentum to challenge the late January peak of 1.1096’. EUR subsequently posted a ‘higher high’ for the sixth straight day as it rose to 1.1053 during NY hours on Friday. The rapid improvement in momentum suggests a move above 1.1096 would not be surprising and if EUR can register a NY closing above this level, it could continue to advance towards 1.1170. All in, there is no sign that the current positive phase in EUR is about to end anytime soon unless there is a breach of 1.0940 (‘strong support’ level was at 1.0920 last Friday).”