FX Strategists at UOB Group noted the upside momentum in EUR/USD remains so far capped by the 1.1870 level.
24-hour view: “The strong rise in EUR to a high of 1.1819 came as a surprise. The rapid advance has scope to extend but in view of the already overbought conditions, the major resistance at 1.1870 is likely out of reach (1.1845 is already quite a strong level). Support is at 1.1800 followed by 1.1770.”
Next 1-3 weeks: “We noted yesterday (05 Apr, spot at 1.1765) that ‘odds for EUR to move below 1.1700 have diminished’ but we did not quite anticipate the sharp bounce to an overnight high of 1.1819. While our ‘strong resistance’ level at 1.1825 is still intact, the rapid improvement in shorterterm upward momentum indicates that the weak phase in EUR that started in late March has run its course. The current movement is viewed as the early stages of a corrective rebound. In view of the nascent build-up in momentum, any EUR strength is likely limited to 1.1870 for now. Overall, EUR is expected to trade with a positive bias as long as it does not move below 1.1745 within these few days.”