EUR/USD needs to clear 1.0800 to allow for extra gains – UOB

Further upside in EUR/USD is seen above the 1.0800 mark, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We held the view yesterday that ‘there is scope for EUR to dip below 1.0625’. Our view turned out to be incorrect as EUR soared to 1.0750 before closing on a strong note at 1.0745 (+0.93%). The rapid rise is accompanied by strong momentum and EUR could continue to rise. That said, the major resistance at 1.0800 is unlikely to come under threat (there is another resistance at 1.0785). Overall, only a break of 1.0705 (minor support is at 1.0725) would indicate that the rapid build-up in momentum has fizzled out.”

Next 1-3 weeks: “We turned negative in EUR yesterday (02 Jun, spot at 1.0650) but we were of the view that any weakness is expected to encounter solid support at 1.0580. We did not expect the swift rebound that took out our ‘strong resistance’ level at 1.0730 (high of 1.0750). While shorter term upward momentum is building quickly, EUR has to break clearly above 1.0800 before further advance is likely. The chance for EUR to break 1.0800 is quite high and would increase further as long as EUR does not move below 1.0675 (‘strong support’ level) within these few days. Looking ahead, the next resistance above 1.0800 is at 1.0850.”