EUR/USD is now forecasted to test the upper end of the 1.1630/1.1830 range in the next weeks, according to FX Strategists at UOB Group.
24-hour view: “We expected EUR to strengthen yesterday but the sudden surge in momentum came as a surprise as it blew past the ‘stiff resistance at 1.1720’ and hit a high of 1.1745. While the rapid rise appears to be running ahead of itself, there is scope for EUR to test the next resistance at 1.1775 first before a more sustained pull-back can be expected. For today, an advance beyond 1.1800 is unlikely. Support is at 1.1715 but the stronger level is at 1.1690.”
Next 1-3 weeks: “The break of our ‘strong resistance’ level at 1.1720 yesterday (high of 1.1745) indicates that the negative phase in EUR that started about 2 weeks ago has run its course. In other words, last Friday’s (25 Sep) low of 1.1611 was the extent of the EUR weak phase (in our latest narrative, we held the view that EUR could dip below 1.1600 but 1.1565 is expected to offer formidable support). The current movement is viewed as the early stages of consolidation even though the improved shorter-term momentum suggests that EUR is likely to probe the top of the expected consolidation range of 1.1630/1.1830 first. At this stage, the prospect for a sustained advance above 1.1830 is not high.”
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