EUR/USD now faces a major hurdle at 1.2010 – UOB

FX Strategists at UOB Group see the upside momentum in the EUR/USD gathering further traction in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum has improved slightly but while EUR could advance further, a clear break of the major resistance at 1.1945 is unlikely’. We added, ‘a breach of 1.1875 would indicate that the current upward pressure has eased’. EUR subsequently dropped to 1.1877 during early NY hours before blasting higher to 1.1955. Upward momentum is strong and EUR could strengthen further. However, overbought conditions suggest that a sustained rise above 1.1985 is unlikely (next resistance is at 1.2010). Support is at 1.1930 followed by 1.1905.”

Next 1-3 weeks: “Yesterday (13 Apr, spot at 1.1915), we held the view that EUR 'could edge above 1.1945 but the next resistance at 1.1985 is unlikely to come into the picture'. While our expectation for EUR to strengthen is correct, we did not quite anticipate the rapid improvement in shorterterm momentum as EUR blasted to a high of 1.1955 during NY hours. The improved momentum is likely to lead to further EUR strength. The next major resistance is at 1.2010. On the downside, a breach of 1.1875 (‘strong support’ level was at 1.1850 yesterday) would indicate that the EUR strength that started earlier last week has run its course..”