Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note EUR/USD could climb to the 1.1300 region in the near term.
Key Quotes
24-hour view: We highlighted yesterday that EUR “is likely to continue to trade sideways.” However, we indicated that “the underlying tone has firmed a tad, and EUR is likely to trade in a higher range of 1.1215/1.1265.” EUR then traded in a range of 1.1207/1.1275 before ending the day little changed at 1.1226 (-0.07%). Momentum indicators are still mostly flat, and we continue to expect EUR to trade sideways. Expected range for today, 1.1195/1.1265.
Next 1-3 weeks: In our most recent narrative from last Friday (14 Jul, spot at 1.1225), we highlighted that while EUR could rise further, “it is premature to expect a move to the 2022 high of 1.1495”. After surging for the most part of last week, EUR has not been able to make much further headway to the upside. Note that yesterday, EUR closed little changed for the third day in a row. The price actions suggest that 1.1495 is unlikely to come into view this time around. That said, there is a chance of EUR rising to 1.1300, before the risk of a pullback increases. On the downside, if EUR breaks below 1.1160 (no change in ‘strong support’ level), it would indicate that the EUR strength that started last Monday has ended.
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