FX Strategists at UOB Group now sees EUR/USD facing some near-term consolidation ahead of a potential move beyond 1.1500 the figure.
24-hour view: “We highlighted yesterday ‘solid upward momentum suggests that EUR could strengthen further to 1.1470’. We added, ‘the next resistance at 1.1515 is however, likely out of reach’. Our view was not wrong as EUR rose to 1.1481 before easing off. Upward momentum has waned somewhat and this coupled with overbought conditions suggests that EUR is unlikely to strengthen much further. For today, EUR is more likely to consolidate and trade between 1.1435 and 1.1485.”
Next 1-3 weeks: “Yesterday (13 Jan, spot at 1.1440), we highlighted that EUR ‘is likely to continue to march higher’. We indicated that ‘the next resistance is at 1.1470 followed by 1.1515’. EUR subsequently rose to 1.1481 before easing off. We continue to expect EUR to move higher towards 1.1515 even though overbought shorter-term conditions could lead to a couple of days of consolidation first. Overall, only a breach of 1.1390 (‘strong support’ level was at 1.1370 yesterday) would indicate that the current upward pressure has eased.”
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