EUR/USD: A breakout of 1.1120 appears likely – UOB

Quek Ser Leang, Markets Strategist at UOB Group, assesses the recent price action around EUR/USD.

Key Quotes

“In our Chart of the Day update from about 3 weeks ago (13 Jan 2023, when EUR/USD was trading at 1.0840), we held the view that EUR/USD is likely to continue to advance. We highlighted that, ‘a break above the top of the weekly Ichimoku cloud at 1.0930 would suggest further upside risk in the months ahead’. We indicated, ‘The next resistance level above 1.0930 is at 1.1120’.”

“EUR/USD subsequently rose but did not break 1.0930 until yesterday (01 Feb 2023) when it blew past 1.0930 and moved above the top of the weekly Ichimoku cloud for the first time since Jun 2021. The price actions have improved the technical outlook for EUR/USD further. Not surprisingly, we continue to expect EUR/USD to advance. While EUR/USD is likely to break above 1.1120, it remains to be seen whether the 2022 high of 1.1495 is within reach in the next few months.”

“On the downside, 1.0785 is a solid support level. However, only a breach of the 55-week exponential moving average (currently at 1.0615) would indicate that the rally that started in Sep 2022 is not extending further.”