In the opinion of FX Strategists at UOB Group Quek Ser Leang and Peter Chia, the recent strong upside in EUR/USD could extend to the 1.0750 region in the next weeks.
24-hour view: “While we expected EUR to strengthen yesterday, we were of the view that ‘a sustained rise above 1.0605 is unlikely’. We did not anticipate the sudden jump in EUR that sent it surging to a high of 1.0697. The rapid rise is overbought but there is scope for EUR to advance further. However, the major resistance at 1.0750 is unlikely to come under threat for now (there is another resistance level at 1.0715). On the downside, a breach of 1.0630 (minor support is at 1.0660) would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Yesterday (23 May, spot at 1.0570), we highlighted that the corrective rebound in EUR has room to extend but 1.0645 is expected to offer solid resistance. Our view for a stronger EUR was not wrong but we did not expect the ease by which it cracked 1.0645 and surged to 1.0697. The strong boost in momentum suggests EUR could continue to advance. The next resistance level of note is at 1.0750. Support is at 1.0630 but only a break of 1.0580 would indicate that the upside risk has dissipated.”
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