EUR/USD: A move to 1.2060 is not favoured near-term – UOB

FX Strategists at UOB Group noted EUR/USD faces extra gains although a test of 1.2060 looks unlikely in the next weeks.

Key Quotes

24-hour view: “We expected EUR to strengthen yesterday but we were of the view that ‘the strong resistance at 1.1980 is unlikely to come into the picture’. EUR held below 1.1980 until late NY hours where it edged to a high 1.1989. From here, EUR could continue to edge higher but any advance is unlikely to challenge the resistance at 1.2030 (1.2010 is already quite a strong level). Support is at 1.1960 followed by 1.1935.”

Next 1-3 weeks: “We have held a negative view in EUR since the start of the month. In our latest narrative from Wednesday (10 Mar, spot at 1.1890), we highlighted that ‘shorter-term momentum is beginning to wane but the overall negative phase is intact unless there is a break of 1.1980’. The breach of 1.1980 during NY hours indicates that the positive phase has run its course. Shorterterm momentum is turning positive and EUR could edge higher but the major resistance at 1.2060 is unlikely to come into the picture. On a shorter-term note, 1.2030 is already a strong level. On the downside, a break of 1.1900 would indicate the current mild upward pressure has eased.”