EUR/USD: Bulls push to test 1.1000 – UOB Group
|Chance for Euro (EUR) to advance further. It could trigger a rapid rise towards 1.1000, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
EUR breaks above 1.0950 and moves towards 1.1000
24-HOUR VIEW: “Last Friday, we held the view that ‘there is room for EUR to test the major support at 1.0760 before a recovery can be expected.’ However, after dipping to a low of 1.0781, EUR lifted off in NY trade, blowing past several strong resistance levels with ease before closing higher by 1.08% (1.0908). The outsized surge appears to be a tad overdone, and today, while EUR could continue to rise, it is unlikely to break last month’s high, near 1.0950. Note that there is another resistance level at 1.0930. To keep the momentum going, EUR must remain above 1.0860 with minor support at 1.0885.”
1-3 WEEKS VIEW: “While we have held a negative EUR view since late last month, we indicated last Thursday (01 Aug, spot at 1.0820) that ‘downward momentum is showing tentative signs of slowing, and the chance of EUR dropping further to 1.0760 is diminishing.’ After EUR fell further to 1.0775, we indicated on Friday (02 Aug, spot at 1.0790) that ‘the slowing momentum has been rejuvenated somewhat, but it remains to be seen if EUR has enough momentum to break clearly below 1.0760.’ EUR subsequently surged, breaking above our ‘strong resistance’ level of 1.0850. Not only has downward momentum fizzled out, but upward momentum has increased. While the outsized short-term surge appears to be overextended, there is chance for EUR to advance further. Looking ahead, if it can break clearly above 1.0950, it could potentially trigger a rapid rise towards 1.1000. Overall, we will hold a positive EUR view, provided that it holds above 1.0820.”
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