The Euro (EUR) is expected to move higher and could break above last week’s high near 1.1010; the next resistance at 1.1050 is likely out of reach. After that, the next level to watch is 1.1070, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
The next resistance is at 1.1050
24-HOUR VIEW: “Yesterday, we detected ‘a slight increase in momentum.’ We expected EUR to edge higher, but we noted that ‘as upward momentum is not strong for now, any advance is unlikely to break the resistance at 1.0960.’ Our view of a higher EUR was not wrong, but we did not anticipate the sudden lift-off that sent it soaring by 0.56% (NY close of 1.0992). We continue to expect EUR to move higher today, and while it could break above last week’s high near 1.1010, overbought conditions suggest that the next resistance at 1.1050 is likely out of reach. To maintain the strong momentum, EUR must not break below 1.0955 with minor support at 1.0975.”
1-3 WEEKS VIEW: “We turned positive EUR early last week. After EUR soared to 1.1008 and pulled back, we indicated last Tuesday (06 Aug, spot at 1.0955) that EUR ‘is still positive, but it has to surpass 1.1010 before further advance to 1.1070 can be expected.’ EUR subsequently traded sideways, and in our most recent narrative from two days ago (12 Aug, spot at 1.0915), we indicated that ‘if EUR breaches the ‘strong support’ level at 1.0875, it would mean the likelihood of it rising to 1.1010 has faded.’ EUR did not breach 1.0875. Instead, it took off and surged to a high of 1.0999 yesterday. Upward momentum has been rejuvenated, and a break of 1.1010 would not be surprising. The next level to watch is 1.1070. Overall, we will continue to hold a positive EUR view as long as 1.0925 (‘strong support’ level previously at 1.0875) is not breached.”
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