Impulsive advance has room to extend to 1.0530; a clear break above this level appears unlikely. In the longer run, rejuvenated upward momentum suggests Euro (EUR) could continue to advance vs US Dollar (USD); the levels to monitor are 1.0530 and 1.0560, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR can continue to advance 1.0530 and 1.0560
24-HOUR VIEW: "Two days ago, EUR fell to a low of 1.0400. Yesterday, when EUR was at 1.0425, we indicated that 'despite the decline, there has been no significant increase in downward momentum,' and we held the view that it 'is likely to trade in a 1.0395/1.0455 range.' Instead of trading in a range, EUR jumped and closed higher by 0.76% (1.0500). While deeply overbought, the impulsive advance has room to extend to 1.0530. Given the overbought conditions, a clear break above this level appears unlikely. To sustain the momentum, EUR must not break below 1.0455 (minor support is at 1.0475)."
1-3 WEEKS VIEW: "We revised our view from positive to neutral yesterday (20 Feb, spot at 1.0425), indicating that EUR 'appears to have moved into a range trading phase, and it is likely to trade between 1.0350 and 1.0500 for the time being.' We did not expect the subsequent strong surge that reached a high of 1.0503. Upward momentum has been rejuvenated, suggesting EUR could continue to advance. That said, there are a pair of major resistance levels at 1.0530 and 1.0560. Overall, only a breach of 1.0425 would invalidate our view."
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