EUR/USD: To test the 1.0970-1.0980 resistance zone – UOB Group

Rejuvenated momentum suggests further Euro (EUR) strength. EUR could test but is unlikely to break clearly above the significant resistance zone between 1.0970 and 1.0980, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Upwards momentum suggests further EUR strength

24-HOUR VIEW: “Our view of EUR trading in a range yesterday was incorrect. Instead of trading in a range, EUR surged, reaching a high of 1.0947 before closing at 1.0937 (+0.37%). Not surprisingly, the sharp advance is overbought. However, as long as 1.0910 (with minor support at 1.0925) is not breached, EUR could test but is unlikely to break clearly above the significant resistance zone between 1.0970 and 1.0980.”

1-3 WEEKS VIEW: “In our most recent narrative from two days ago (16 Jul, spot at 1.0895), we highlighted that ‘while there is still scope for EUR to rise further, upward momentum is slowing, and it remains to be seen if any further advance can reach 1.0940.’ We also highlighted that ‘a breach of 1.0850 (no change in ‘strong support’ level) would mean that the EUR strength from early this month (as annotated in the chart below) has run its course.’ Yesterday, EUR took off and broke above 1.0940, reaching a high of 1.0947. The rejuvenated upward momentum suggests further EUR strength, even though the 1.0970/1.0980 zone is expected to pose significant resistance. On the downside, the ‘strong support’ level has moved higher to 1.0885 from 1.0850.”