EUR/USD: Risk of breaking above 1.0850 increases – UOB Group
|The Euro (EUR) is expected to continue to trade in a range, probably between 1.0800 and 1.0840. Risk of EUR breaking above 1.0850 has increased, albeit moderately, UOB Group FX strategists Quek Ser Leang and Peter Chia note.
Next level to watch above 1.0850 is 1.0915
24-HOUR VIEW: “Yesterday, we pointed out that ‘momentum indicators are turning flat,’ and we expected EUR to trade in a 1.0795/1.0845 range. EUR then traded in a relatively narrow range between 1.0804 and 1.0833, closing at 1.0812 (-0.09%). The quiet price action provides no fresh clues, and we continue to expect EUR to trade in a range, probably between 1.0800 and 1.0840.”
1-3 WEEKS VIEW: “Last Thursday (04 Jul, spot at 1.0785), we indicated that ‘while the increase in momentum suggests further EUR strength, it is too early to determine if it can reach the major resistance at 1.0850.’ After EUR rose, we indicated on Monday (08 Jul, spot at 1.0825) that ‘the risk of EUR breaking above 1.0850 has increased, albeit moderately.’ EUR traded in a quiet manner yesterday, and there is no change in our view. Overall, only a breach of 1.0770 (no change in ‘strong support’ level from yesterday) would indicate that the current upward pressure has faded. Looking ahead, the next level to watch above 1.0850 is 1.0915.”
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