Outsized rally seems excessive; instead of continuing to rise, Euro (EUR) is more likely to pause and trade in a 1.0950/1.1150 range vs US Dollar (USD). In the longer run, upside risk is intact; it remains to be seen if EUR can break the significant weekly resistance zone of 1.1215/1.1230, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
EUR can target the significant weekly resistance zone of 1.1215/1.1230
24-HOUR VIEW: "After EUR traded in a volatile manner the previous day and early yesterday, we highlighted that 'the outlook is unclear' and we held the view that USD 'could continue to trade in a choppy manner, probably between 1.0810 and 1.0955.' We did not anticipate the surge in EUR that resulted in a daily gain of 1.80% (1.1050), its biggest one-day rise since Nov 2022. The outsized rally seems excessive and instead of continuing to rise, EUR is more likely pause and trade in a 1.0950/1.1150 range."
1-3 WEEKS VIEW: "We highlighted yesterday, 03 Apr, when EUR was at 1.0890 that 'the bias for EUR is on the upside.' We also highlighted that 'the 1.0955/1.0985 zone is expected to offer solid resistance.' However, EUR not only blew past the resistance zone, but it also surged further to 1.1144. While the upside risk is intact, it remains to be seen if EUR can break the significant weekly resistance zone of 1.1215/1.1230. The upside risk will stay intact as long as 1.0850 is not breached (‘strong support’ level was at 1.0770 yesterday)."
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