EUR/USD: Chance for EUR to retest 1.1830 – UOB Group

Conditions remain overbought, but there is a chance for Euro (EUR) to retest 1.1830 against US Dollar (USD); the likelihood of it rising above 1.1850 is not high. In the longer run, overbought conditions suggest a slower pace of advance, and it remains to be seen whether 1.1900 is within reach, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Likelihood of it rising above 1.1850 is not high

24-HOUR VIEW: "EUR rose to a high of 1.1788 two days ago. In the early Asian session yesterday, when EUR was at 1.1780, we indicated the following: 'The rapid increase in momentum is likely to lead to further EUR strength, possibly testing 1.1820. Based on the current overbought momentum, EUR is unlikely to threaten the next resistance at 1.1850.' Our assessments were not wrong, as EUR rose to 1.1829 before pulling back to close at 1.1805, up 0.16%. While conditions remain overbought, there is a chance for EUR to retest the 1.1830 level before a more sustained pullback is likely. The likelihood of EUR rising above 1.1850 is not high. On the downside, a breach of 1.1760 (minor support is at 1.1780) would suggest EUR is not retesting the 1.1830 level."

1-3 WEEKS VIEW: "We turned positive on EUR last Thursday, 26 Jun, when it was at 1.1670. Tracking the subsequent advance, we highlighted yesterday (01 Jul, spot at 1.1780) that 'our EUR view remains positive, and the levels to watch now are 1.1820 and 1.1850.' EUR then rose to a high of 1.1829 before closing higher for the ninth straight day at 1.0805 (+0.16%). There is no change in our positive view, but upward momentum has slowed somewhat. This, combined with overbought conditions suggests a slower pace of advance and it remains to be seen whether 1.1900 is within reach this time around. Note that 1.1850 remains a resistance level. Overall, only a breach of 1.1715 (‘strong support’ level was at 1.1680 yesterday) would indicate that EUR is not rising further."