EUR/USD could attempt to test 1.1125 – UOB

FX Strategists at UOB Group thought EUR/USD could attempt a move higher to the 1.1125 level.

• "24-hour view: We highlighted yesterday ‘the underlying tone still appears to be firm and we continue to see chance for EUR to edge above last month’s 1.1096-peak’. We added, ‘the next resistance at 1.1125 is likely out of reach’. EUR subsequently popped to a high of 1.1115 during late London hours but the advance was short-lived as it dropped back quickly to end the day little changed at 1.1076 (-0.05%). Upward pressure has eased and the current movement is viewed as the early parts of a consolidation phase. For today, EUR is expected to trade sideways to slightly lower, likely between 1.1055 and 1.1100.
• Next 1-3 weeks: There is not much to add to the update from yesterday (04 Nov, spot at 1.1080). As highlighted, while it is too early to expect a sustained advance, EUR could test the strong 1.1125 resistance. However, the rapid retreat from the NY hour peak of 1.1115 has weakened the underlying tone somewhat. That said, only a break of 1.1035 (‘strong support’ level was at 1.1020 yesterday) would indicate the current upward pressure has eased. Until there is a break of the ‘strong support’ level, another ‘stab’ at 1.1125 is not ruled out just yet.”