EUR/USD could test 1.1700 on a breakout of 1.1620 – UOB

The pair could extend the march north to the 1.1700 area in case it breaks above 1.1620, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The anticipated strength in EUR exceeded our expectation as it took out the strong 1.1560 resistance and hit a high of 1.1593. The subsequent strong daily closing in NY (closed at 1.1593) suggests that the immediate pressure is still on the upside. That said, overbought condition could limit any gains to 1.1620 (there is another rather strong resistance at 1.1650). On the downside, only a break of 1.1540 would indicate that a short-term top is in place (minor support at 1.1570)”.

Next 1-3 weeks: “We highlighted on Wednesday (10 Oct, spot at 1.1500) that EUR is expected to “trade sideways to slightly higher” within a 1.1450/1.1620 consolidation range. We added yesterday (11 Oct, spot at 1.1525), “EUR appears more likely to move towards the top of the expected 1.1450/1.1620 consolidation range first”. While the overall price action has been in line with our expectation, the pace of the advance has been faster than anticipated as EUR surged by +0.65% yesterday, the largest 1-day gain in 3 weeks. From here, the prospect for a break of 1.1620 has increased and a clear breach of this level would suggest there is scope for further EUR strength towards 1.1700. All in, EUR is expected to stay underpinned in the coming days and only a break of the ‘key support’ at 1.1500 would indicate that a short-term top is in place”.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.