FX Strategists at UOB Group note EUR/USD now targets the 1.19 level and above in the next weeks.

Key Quotes

24-hour view: “Our view for EUR to strengthen yesterday was correct but our expectation that ‘1.1855 is not expected to come into the picture’ was not as EUR rose to a high of 1.1859. The surge in momentum appears to be overdone but with no sign of weakness just yet, EUR could continue to advance. That said, October’s peak at 1.1880 is a solid resistance and while EUR could break this level, it is unlikely able to maintain a foothold above it. Next resistance is at 1.1915. Support is at 1.1785 but only a break of 1.1760 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “Two days ago (04 Nov, spot at 1.1670), we highlighted that ‘further EUR strength is not ruled out but it is too soon to expect a move towards last month’s top at 1.1880’. We added, ‘1.1855 is already quite a strong level’. The rapid pace (and ease) by which EUR cracked 1.1850 yesterday (05 Nov) came as a surprise. Note that EUR closed higher by a whopping +0.90% (1.1827). Further gains are not ruled out but it appears too early to call the current advance as the start of the move towards the year-to-date high at 1.2011. Only a daily closing above 1.1915 would indicate that EUR is ready for 1.2011. Meanwhile, the outlook for EUR is positive as long as it does not move below 1.1710 (‘strong support’ level). On a shorter-term note, 1.1760 is already a strong support level.”

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