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FX Strategists at UOB Group suggested further gains in EUR/USD look likely although they could be capped around the 1.1080 region.

Key Quotes

24-hour view: “Expectation for “sideway-trading” was incorrect as EUR soared and closed sharply higher (+0.56%, 1.1033). While there is scope for the advance to extend further, overbought conditions suggest any up-move could be ‘limited’ to a test of 1.1080. Support is at 1.1000 but only a move below 1.0975 would indicate that a short-term top is in place”.

Next 1-3 weeks: “While we highlighted yesterday “downward momentum is dented”, the subsequent strong advance in EUR that came close to taking out the 1.1045 ‘key resistance’ came as a surprise (overnight high of 1.1037). While the ‘key resistance’ is still intact, the price action over the past two days is enough to indicate that Tuesday’s (03 Sep) low of 1.0924 is a short-term bottom. The current price action is viewed as the early stages of a consolidation phase. In other words, EUR is expected to trade sideways from here, likely between 1.0950 and 1.1110″.