EUR/USD could now challenge the 1.0785 level – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest EUR/USD could revisit the 1.0785 region in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘There is room for the advance in EUR to edge above 1.0685 first before easing’. We added, ‘The next resistance at 1.0715 is not expected to come into view’. However, EUR cracked 1.0715 and rose to 1.0760 before pulling back. In view of the strong momentum, EUR is likely to strengthen further but it might not be able to maintain a foothold above 1.0785. Support is at 1.0700, followed by 1.0665. “

Next 1-3 weeks: “While we indicated yesterday (09 Jan, spot at 1.0645) that EUR is likely to trade with an upward bias, we held the view that the odds for a sustained rise above 1.0735 are not high. In other words, we did not expect the strong surge that sent EUR to a high of 1.0760 and the strong closing at 1.0728 (+0.79%). The ease with which EUR took out 1.0735 suggests it is likely to take a crack at another strong resistance level at 1.0785. Overall, EUR is likely to trade higher as long as it stays above 1.0635 (‘strong support’ level was at 1.0535 yesterday). Looking ahead, a breach of 1.0785 will shift our focus to 1.0900.”