FX Strategists at UOB Group see EUR/USD advancing to levels above the 1.1100 handle on a daily close beyond 1.1050.
24-hour view: “EUR traded between 1.0989 and 1.1045 yesterday before closing little changed at 1.1031 (+0.03%). The registered range was lower than our expected sideway-trading range of 1.1000/1.1050. The underlying tone has improved somewhat and the immediate bias is skewed to the upside. That said, any advance is likely limited to a test of last week’s peak near 1.1060 (a sustained advance above this level is unlikely). Support is at 1.1005 followed by 1.0970”.
Next 1-3 weeks: “EUR briefly dipped to 1.0989 before rebounding quickly to close at 1.1031 (+0.02%). The NY closing is still below 1.1050 and as highlighted on Monday (14 Oct, spot at 1.1025), EUR has to close above this level in order to indicate it is ready to move higher to 1.1110. The relatively quiet price action over the past couple of days has resulted in a loss in momentum. From here, unless EUR can move clearly above 1.1050 within these 1 to 2 days, a break of 1.0970 (no change in ‘strong support’ level) would mean that EUR is not ready for 1.1110 just yet and it could consolidate and trade sideways for a period. At this stage, we would say the probability for a NY closing above 1.1050 within these 1 to 2 days is slightly less than even”.
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