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UOB Group’s FX Strategists noted EUR/USD could gradually approach to 1.1980 in the next weeks.

Key Quotes

24-hour view: “We expected EUR to strengthen yesterday and were of the view that ‘a break of 1.1920 could potentially trigger further buying towards the next resistance at 1.1955’. While EUR cracked 1.1920, there was not much follow-through (high of 1.1929). Upward momentum still appears to be relatively strong and from here, there is room for EUR to test 1.1955 first before a pullback can be expected. The next resistance at 1.1980 is unlikely to come into the picture. Support is at 1.1890 followed by 1.1875.”

Next 1-3 weeks: “Two days ago (24 Nov, spot at 1.1845), we held the view that EUR ‘could trade sideways for a period of time and only a break out of the expected 1.1760/1.1920 range would indicate the start of a more sustained directional movement’. While EUR cracked the solid resistance at 1.1920 yesterday, the subsequent price actions were surprisingly muted (high of 1.1929). That said, further EUR strength is expected even though any advance could be slow going and the next resistance at 1.1980 may not come into the picture so soon. On the downside, a break of 1.1840 (‘strong support’ level) would indicate that the risk for further EUR strength has dissipated.”

 

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