EUR/USD: a test of 1.1125 should not be ruled out – UOB

In view of FX Strategists at UOB Group, EUR/USD could attempt a move higher to the 1.1125 level.

Key Quotes

24-hour view: “We highlighted yesterday ‘the underlying tone still appears to be firm and we continue to see chance for EUR to edge above last month’s 1.1096 peak’. We added, ‘the next resistance at 1.1125 is likely out of reach’. EUR subsequently popped to a high of 1.1115 during late London hours but the advance was short-lived as it dropped back quickly to end the day little changed at 1.1076 (-0.05%). Upward pressure has eased and the current movement is viewed as the early parts of a consolidation phase. For today, EUR is expected to trade sideways to slightly lower, likely between 1.1055 and 1.1100.”

Next 1-3 weeks: “There is not much to add to add to the update from yesterday (04 Nov, spot at 1.1080). As highlighted, while it is too early to expect a sustained advance, EUR could test the strong 1.1125 resistance. However, the rapid retreat from the NY hour peak of 1.1115 has weakened the underlying tone somewhat. That said, only a break of 1.1035 (‘strong support’ level was at 1.1020 yesterday) would indicate the current upward pressure has eased. Until there is a break of the ‘strong support’ level, another ‘stab’ at 1.1125 is not ruled out just yet.”