EUR/USD: Risks now shifts to the upside – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, EUR/USD now targets the 1.0620 level in the next few weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘Further EUR strength is not ruled out but the major resistance at 1.0500 is unlikely to come into view today’. The anticipated advance exceeded our expectations as EUR surged to a high of 1.0533. While EUR could continue to advance and break the major resistance at 1.0550, the next resistance at 1.0620 is likely out of reach today. Support is at 1.0490, followed by 1.0460.”

Next 1-3 weeks: “We turned positive in EUR yesterday (01 Dec, spot at 1.0420) but we were of the view that ‘the solid resistance at 1.0500 might not be easy to break’. We did anticipate the rapid pace of advance as EUR continues to surge for the second day in a row and took out 1.0500 (high has been 1.0533). While deeply overbought, the rally is not showing signs of slowing and the risk remains on the upside. The next level to focus on is at 1.0620, followed by 1.0690. The upside risk is intact as long as EUR does not move below 1.0420 (‘strong support’ level was at 1.0330 yesterday).”