EUR/USD could attempt a move to 1.20 and above – UOB

UOB Group’s FX Strategists noted EUR/USD is expected to shift the attention to the area above 1.2000 if 1.1980 is cleared in the next weeks.

Key Quotes

24-hour view: “Our expectation for EUR to ‘trade within a 1.1880/1.1935 range’ was wrong as it soared to a high of 1.1964 before closing on a firm note at 1.1962 (+0.41%). Upward momentum is strong and EUR is likely to continue to advance. A break of 1.1980 would not be surprising even though the year-to-date high at 1.2011 could be out of reach for now. Support is at 1.1940 followed by 1.1920.”

Next 1-3 weeks: “Last Thursday (26 Nov, spot at 1.1915), we held the view that EUR ‘is expected to strengthen but any advance is likely to be slow-going and 1.1980 may not come into the picture so soon’. While our view for a higher EUR was not wrong, the pace by which EUR is approaching 1.1980 is faster than expected. From here, a break of 1.1980 would shift the focus to the year-to-date high at 1.2011. A break of this rather critical level could potentially lead to a rapid rise towards the next resistance at 1.2060. All in, only a break of 1.1900 (‘strong support’ previously at 1.1840) would indicate that the risk for further EUR strength has dissipated.”