In opinion of FX Strategists at UOB Group, a breakout of 1.0925 should allow EUR/USD to attempt a move to 1.0980 in the near-term.
24-hour view: “We highlighted yesterday that EUR ‘could edge above the strong 1.0900 resistance but 1.0925 is unlikely to come into the picture’. EUR subsequently rose to 1.0908 before easing off quickly. While upward pressure has eased, it is too early to expect a significant pullback. For today, could try to move above 1.0900 again but any advance is still unlikely to move beyond 1.0925. Support is at 1.0840 followed by 1.0820.”
Next 1-3 weeks: “We indicated on Monday (24 Feb, spot at 1.0835) that the weak phase in EUR that started in early February has ended. Our view was that EUR has moved into a consolidation phase and is expected to trade within a relatively broad 1.0770/1.0900 range. EUR rose to 1.0890 yesterday (25 Feb) and upward momentum is beginning to improve. For now, we continue to hold the same view but if EUR were to register a NY closing above 1.0925, it would indicate the start of a stronger rebound towards 1.0980. The prospect for such a scenario is not high for now but it would continue to increase if EUR can hold above 1.0805 within these few days.”
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