Following the recent up move, FX Strategists at UOB Group now expect EUR/USD to advance to 1.1165.
24-hour view: “While we held the view “further EUR gains appear likely”, we expected any EUR strength to encounter “solid resistance near last month’s peak at 1.1110 (next resistance at 1.1135)”. EUR subsequently surged to 1.1139 during London hours before trading mostly sideways and ended the day on a strong note at 1.1122 (+0.47%). The advance is in overbought territory now but strong momentum suggests EUR could move above the 1.1139 peak even though the major 1.1165 resistance level is likely out of reach for today. On the downside, support is at 1.1100 but only a break of 1.1080 would suggest the current strong upward pressure has eased”.
Next 1-3 weeks: “We indicated yesterday (17 Oct, spot at 1.1075) that “upward momentum has improved considerably” and “a break of 1.1110 would not be surprising”. EUR subsequently soared to 1.1139 before ending the day on a strong note. As highlighted yesterday, the next resistance at 1.1165 is a significant mid to long-term resistance and if EUR were to register a weekly closing above this level, it would suggest further EUR strength in the coming weeks/months. Meanwhile, the focus is firmly at 1.1165 and only a break of 1.1050 (‘strong support’ was at 1.1000 yesterday) would indicate the risk of a break of 1.1165 has dissipated. Looking ahead, the next resistance above 1.1165 is at 1.1200 followed by 1.1250”.