EUR/USD may edge higher within a range of 1.1360/1.1420 – UOB Group

Upward momentum is slowing, but Euro (EUR) could edge higher within a range of 1.1360/1.1420 vs US Dollar (USD). In the longer run, a decisive break above 1.1435 could push EUR to 1.1475, with potential for further gains, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

A decisive break above 1.1435 can push EUR to 1.1475

24-HOUR VIEW: "We highlighted yesterday that EUR 'could test the major resistance at 1.1400, but a sustained rise above this level is unlikely.' We pointed out, 'the next major resistance at 1.1435 is also unlikely to come under threat.' Our analysis turned out to be correct, as EUR rose to 1.1418 and then eased off to close at 1.1387, up 0.20%. Although upward momentum is slowing, there is scope for EUR to edge higher today. However, any advance is likely part of a 1.1360/1.1420 range. To put it another way, EUR is unlikely to break clearly above 1.1420."

1-3 WEEKS VIEW: "Last Thursday (22 May, spot at 1.1325), we indicated that 'the price action suggests further EUR strength, with 1.1400 now in focus.' Yesterday (26 May), when EUR was at 1.1370, we stated that 'the likelihood of EUR breaking above 1.1400 is increasing.' We also stated that 'should EUR break above 1.1400, there is a relatively nearby resistance at 1.1435.' EUR/USD subsequently rose to a high of 1.1418. As stated, the next level to monitor is 1.1435. A decisive break above 1.1435 could push EUR to 1.1475, with potential for further gains. Conversely, should EUR break below 1.1320 (‘strong support’ level was at 1.1275), it would mean that the EUR strength from the middle of last week (see annotations in the chart below) has come to an end."