EUR/USD needs to clear 1.1930 to allow extra gains – UOB

FX Strategists at UOB Group noted EUR/USD could advance to 1.20 on a close above 1.1930 in the next weeks.

Key Quotes

24-hour view: “While our view for EUR to strengthen yesterday was correct, instead of ‘edge higher towards 1.1840’, EUR soared to within a few pips of July’s peak at 1.1908 (overnight high of 1.1905). The rapid rise appears to be running ahead of itself but there is room for EUR to make one more push higher towards 1.1930 (minor resistance is at 1.1905) before a sustained pullback can be expected. Support is at 1.1845 followed by 1.1820.”

Next 1-3 weeks: “We highlighted on Tuesday (04 Aug, spot at 1.1760) that EUR ‘is in the early stages of a consolidation phase’ and ‘is expected to trade between 1.1600 and 1.1900’. The rapid manner by which EUR moved towards the top of the range was not exactly expected (overnight high of 1.1905). While upward momentum is beginning to improve, it appears too early to expect a resumption of the recent positive phase in EUR. Only a daily closing above 1.1925 would indicate that EUR is ready to tackle the round-number resistance at 1.2000. At this stage, the probability for such a move is not high but it would continue to increase as long as EUR does not move below the ‘strong support’ at 1.1780.”