FX Strategists at UOB Group remain neutral on spot and sees the next target at 1.2425 in the near term.
24-hour view: “The anticipated EUR strength exceeded our expectation by easily taking out the strong 1.2360 resistance (overnight high of 1.2394). While the swift rally appears to be running ahead of itself, a break above the overnight high would not be surprising. That said, there is another strong resistance at 1.2425 and a sustained move beyond this level seems unlikely, at least not for today. Support is at 1.2360 followed by 1.2340. Yesterday’s low near 1.2323 is not expected to come into the picture”.
Next 1-3 weeks: “We have held the same view since last Friday (13 Apr, 1.2325) wherein we “continue to see chance for a move higher towards 1.2400 even though upward momentum has been dented”. In line with expectation, EUR rose yesterday and hit a high of 1.2394 before ending the day on a strong note (close at 1.2378). While upward momentum is still not as strong as preferred, the current short-term strength has scope to extend further to the next resistance at 1.2425. In our eyes, this is a rather critical resistance as a clear break of this level would greatly improve the odds for a move beyond last month’s peak near 1.2475 (even though it is premature to anticipate such a move at this stage). All in, we expect EUR to remain supported from here and only a break of 1.2310 (‘key support’ previously at 1.2280) would indicate that the current upward pressure has eased”.
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