EUR/USD could climb towards the 1.1120 level – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang note the upward momentum is building in EUR/USD, with the next target at 1.1120.

Key Quotes

24-hour view: “We noted yesterday that ‘the underlying tone has firmed somewhat’ and we expected EUR to edge higher. However, we were of the view that ‘a clear break above 1.1025 appears unlikely’. The anticipated EUR strength exceeded our expectations as EUR soared to a high of 1.1050. While the rapidly improving momentum suggests EUR is likely to advance further, it remains to be seen if it can maintain a foothold above the month-to-date high of 1.1075. The next major resistance at 1.1120 is unlikely to come into view today. The upward pressure is intact as long as EUR stays above 1.1010 (minor support is at 1.1025).”

Next 1-3 weeks: “Yesterday (24 Apr, spot at 1.0990) we highlighted that ‘downward pressure has eased’. We added, ‘The outlook is neutral for the time being and EUR is likely to trade sideways in a range of 1.0900/1.1050’. We did not anticipate the swift and sharp rise to 1.1050. Upward momentum is building rapidly and EUR is likely to trade with an upward bias from here. However, it has to break and stay above the month-to-date high of 1.1075 before a move to the next major resistance at 1.1120 is likely. All in all, only a break of 1.0975 (‘strong support’ level) would indicate that the build-up in momentum has faded.”