EUR/USD: Upward momentum is beginning to build – UOB Group
|The Euro (EUR) is expected to consolidate between 1.0850 and 1.0905. In the longer run, upward momentum is beginning to build, but any advance in EUR is likely to face significant resistance at 1.0935, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
EUR is likely to face resistance at 1.0935
24-HOUR VIEW: “We noted yesterday that ‘the outlook for EUR is mixed.’ We expected it to ‘trade sideways, likely staying within last Friday’s range of 1.0831/1.0905.’ EUR subsequently traded in a narrower and higher range of 1.0870/1.0914, closing at 1.0877 (+0.40%). The price movements did not result in any increase in either downward or upward momentum. The current price movements are likely part of a consolidation phase. Today, we expect EUR to trade between 1.0850 and 1.0905.”
1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (01 Nov, spot at 1.0885), wherein ‘upward momentum is beginning to build, but any advance in EUR is likely to face significant resistance at 1.0935.’ Yesterday, EUR gapped higher upon opening. During London trade, it rose briefly to a fresh 3-week high of 1.0914 before pulling back to close at 1.0877. While we continue to expect EUR to advance, there has been no further increase in momentum, and it remains to be seen if it can break above 1.0935 in a sustained manner. On the downside, a breach of 1.0830 (‘strong support’ level previously at 1.0815) would mean that the current upward pressure has faded.”
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