In opinion of FX Strategists at UOB Group, EUR/USD remains firm and could advance to the 1.1910 area in the next weeks.
Key Quotes
24-hour view: “Yesterday, we expected EUR to ‘test the major resistance at 1.1865’ and we held the view that ‘a sustained rise above this level is unlikely’. Our view was not wrong as EUR rose to 1.1876 even though the advance was more resilient than expected as EUR closed on a firm note at 1.1873 (+0.30%). While overbought, the advance in EUR is not showing any signs of weakening just yet. In other words, further EUR strength seems likely. That said, the next major resistance at 1.1910 could be out of reach (there is a minor resistance at 1.1895). Support is at 1.1850 but only a break of 1.1830 would indicate that the current upward pressure has eased.”
“We highlighted yesterday (02 Sep, spot at 1.1845) that while upward momentum has not improved by much, a break of 1.1865 would not be surprising. We added, the next level to focus on above 1.1865 is a rather solid resistance at 1.1910. EUR subsequently breached 1.1865 as it rose to 1.1876. Upward momentum has improved further and the risk for EUR is still on the upside. The next level to focus on is a solid resistance at 1.1910. All in, the current EUR strength that started early last week (see annotations in the chart below) is deemed intact as long as EUR does not move below the ‘strong support’ at 1.1800 (level was previously at 1.1775). Looking ahead, if EUR breaks above 1.1910, the next level to monitor is at 1.1970.”
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