According to FX Strategists at UOB Group, a close above 1.1050 could spark a move to 1.11 and above.
Key Quotes
24-hour view: “Against our expectation for “sideway-trading”, EUR extended its gain to 1.1062 before easing off to close at 1.1040. Upward momentum still appears to be over-stretched and further sustained EUR strength appears unlikely, at least for today. EUR is more likely to consolidate its gains and trade sideways, likely between 1.0990 and 1.1050”.
Next 1-3 weeks: “While we expected EUR to “test the strong 1.1050 resistance” last Friday (11 Oct, spot at 1.1005), we held the view that “the strong resistance may not be easy to crack”. We added, “Looking ahead, if EUR were to register a NY closing above 1.1050, further gains towards last month’s top near 1.1110 would not be surprising”. EUR subsequently rose to 1.1062 before slipping to end the day at 1.1040. Shorter-term indicators are overbought and from here, we will ‘upgrade’ the current positive call for EUR further only if it can close above 1.1050. At this stage, the odds for such a scenario are slightly higher than even. On the downside, the ‘strong support’ has edged higher to 1.0970 from 1.0955. Only a breach of the ‘strong support’ would indicate that the current upward pressure has eased”.
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