EUR/USD: Outlook positive while above 1.1760 – UOB

FX Strategists at UOB Group noted the outlook for EUR/USD is seen as positive while above 1.1760 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while upward momentum has slowed, there is room for EUR to edge higher’. We added, ‘the major resistance at 1.1835 is still likely out of reach’. While our view for EUR to strengthen was not wrong, EUR rose to 1.1847 before dropping quickly to close slightly higher for the day (1.1807, +0.10%). Upward pressure has eased and the current movement is viewed as part of a consolidation phase. In other words, EUR is likely to trade sideways for today, expected to be within a 1.1785/1.1835 range.”

Next 1-3 weeks: “We have held a positive view in EUR since last Tuesday (24 Aug, spot at 1.1745). In our latest narrative from Monday (30 Aug, spot at 1.1795), we indicated that upward momentum has improved and we see room for the current EUR strength to extend to 1.1835. EUR broke above 1.1835 yesterday (31 Aug) as it rose to 1.1847 before pulling back. Shorter-term upward momentum appears to have waned somewhat but the current positive outlook is deemed intact as long as EUR does not move below 1.1760 (‘strong support’ level previously at 1.1735). To look at it another way, as long as the ‘strong support’ level is not breached, EUR could advance further. The next level to focus on is at 1.1865.”