EUR/USD seen testing 1.1850 in the short-term

FX Strategists at UOB Group remain neutral on spot while noted that a test of 1.1850 stays well on the cards in the next weeks.

Key Quotes

24-hour view: “While we highlighted yesterday “the consolidation phase appears to be close to completion”, our expectation for a likely downside break was wrong. EUR staged an abrupt and sharp rally that blast past the major 1.1725/35 resistance zone and came close to the next major resistance at 1.1790 (overnight high of 1.1785). The strong surge seems to be running ahead of itself but there is ample room for a move above 1.1790. That said, the June’s peak near 1.1851 is likely out of reach for today (minor resistance at 1.1825). On the downside, 1.1720 is expected to be strong enough to hold any intraday pullback (minor support is at 1.1750)”.

Next 1-3 weeks: “We have held the same view since last Friday wherein the “probability for a move to 1.1790 has increased”. EUR subsequently traded sideways for several days and our resolve was tested as we indicated yesterday that the “prospect for further EUR strength has diminished”. Just when we thought time was running out for our view to work out, EUR rocketed and blast past the strong 1.1725/35 resistance zone and hit a high of 1.1785 (holding just a few pips below 1.1790). The outsized rally (the +0.88% up-move yesterday was the largest 1-day gain in 3 months) coupled with the break of strong resistance levels indicates scope for further EUR strength towards the next resistance at 1.1850 (June’s peak). All in, we expect EUR to trade on a firm footing from here and only a break of 1.1690 (‘key support’ previously at 1.1640) would indicate that the current EUR strength has run its course”.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.