UOB Group’s FX Strategists expect further gains in EUR/USD as long as it trades above the 1.1965 level.
Key Quotes
24-hour view: “Yesterday, we held the view that EUR ‘could edge higher to 1.2060 but is unlikely to break the next resistance at 1.2080’. Our view was not wrong as EUR rose to 1.2069. That said, we did not anticipate the subsequent sharp and swift sell-off (EUR fell to 1.1992 during NY hours). While downward momentum has not improved by much, there is room for EUR to drop below the overnight low. However, any weakness is viewed as part of a lower range of 1.1985/1.2045. In other words, a clear break of 1.1985 is unlikely.”
Next 1-3 weeks: “Our update from yesterday (22 Apr, spot at 1.2035) still stands. As highlighted, the positive phase that started more than 2 weeks ago is still intact as long as EUR does not move below 1.1965. That said, upward momentum is beginning to wane and the prospect for EUR to advance to 1.2115 has diminished. From here, EUR has to move and stay above 1.2070 within these 1 to 2 days or a break of 1.1965 (no change in ‘strong support’ level) would not be surprising and would indicate that the positive phase has ended.”
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