Strong momentum points to further Euro (EUR) strength; it remains to be seen if it can break clearly above 1.0610. In the longer run, EUR has to break and remain above 1.0610 before further advance to 1.0650 is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Strong momentum points to further EUR strength
24-HOUR VIEW: “Our view of range trading yesterday was incorrect. Instead of trading in a range, EUR soared to 1.0589, closing on a strong note at 1.0586, higher by 0.72%. Strong momentum points to further EUR strength. However, it remains to be seen if it can break clearly above the major resistance at 1.0610. The next resistance at 1.0650 is unlikely to come under threat. To keep the momentum going, EUR must remain above 1.0540, with minor support at 1.0560.”
1-3 WEEKS VIEW: “We highlighted on Tuesday (03 Dec, spot at 1.0500) that ‘instead of a rebound, EUR is expected to trade in a range for now, most likely between 1.0430 and 1.0580.’ Yesterday, EUR soared above 1.0580, reaching a high of 1.0589. While the increase in momentum suggests EUR strength, it has to break and remain above 1.0610 before further advance is likely. The probability of EUR breaking clearly above 1.0610 appears to be high, provided that it stays above 1.0500 in the next few days. Looking ahead, the next level to watch above 1.0610 is 1.0650.”
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