In opinion of FX Strategists at UOB Group, the upside momentum in EUR/USD could extend to the 1.1200 neighbourhood in the next weeks.
24-hour view: “While we expected EUR to strengthen last Friday, we held the view “the major 1.1165 resistance level is likely out of reach”. The subsequent advance in EUR exceeded our expectation of it rose to 1.1172 before closing on a strong note at 1.1169 (+0.42%). The rally is deep in overbought territory and further sustained gain is not likely for today. EUR is more likely to consolidate and trade sideways, expected to be within a 1.1130/1.1180 range”.
Next 1-3 weeks: “We maintain our positive outlook for EUR and highlighted last Friday (18 Oct, spot at 1.1120) that “the focus is firmly at the 1.1165 resistance now”. EUR subsequently rose to 1.1172 before ending the day (and the week) on a strong note (NY close of 1.1169, +0.42%). The current EUR rally still appears ‘healthy’ and a move above 1.1200 would not be surprising but 1.1250 is a much stronger resistance and may not yield as easily. On the downside, only a break of 1.1070 (‘strong support’ level slightly higher than 1.1050 previously) would indicate that the current positive phase in EUR that started more than a week ago has run its course”.
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