EUR/USD now looks to test 1.0885 – UOB

Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, now see EUR/USD advancing to the 1.0885 level in the next weeks.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘downward pressure has eased’ and we expected EUR to ‘consolidate and trade sideways’. However, instead of trading sideways, EUR soared to 1.0866 before closing on a firm note at 1.0850 (+0.59%). There is scope for EUR to advance further to 1.0885 (minor resistance is at 1.0870). For today, a sustained rise above this level is unlikely. Support is at 1.0820 followed by 1.0795.”

Next 1-3 weeks: “Our latest narrative was from Monday (18 Apr, spot at 1.0805) where the risk for EUR is on the downside even though it may trade above the solid support at 1.0755 for a couple of days first. We highlighted that ‘only a break of 1.0845 would indicate that the downside risk has dissipated’. Yesterday (20 Apr), EUR rebounded strongly and cracked 1.0845 (high has been 1.0866). Downward pressure has dissipated and the rebound could extend to 1.0885. Further extension is not ruled out but at this stage, the odds for EUR to advance to 1.0925 are low. On the downside, a breach of 1.0775 (‘strong support’ level) would indicate that EUR is likely to consolidate and trade sideways for a period of time.”