EUR/USD: Sustained gains likely above 1.0800 – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD could extend gains once 1.0800 is cleared.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘there is room for EUR to rise to 1.0760 before a pullback is likely’. We added, ‘The major resistance at 1.0800 is unlikely to come into view’. The anticipated advance was stronger than expected as EUR soared to a high of 1.0788. While overbought, the rapid rise is not showing signs of weakness just yet. Today, EUR could rise above 1.0800 but it remains to be seen if it can maintain a foothold above this major resistance level (the next resistance is at 1.0850). Support is at 1.0745, a breach of 1.0720 would indicate that EUR is not advancing further.”

Next 1-3 weeks: “On Monday (20 Mar, spot at 1.0680), we indicated that EUR appears to be trading in a consolidation phase, likely in a broad range between 1.0600 and 1.0800. Yesterday (21 Mar, spot at 1.0720), we highlighted that ‘the firm short-term outlook suggest EUR is likely to test 1.0800 in the next few days’.  Upward momentum is beginning to improve but EUR has to break and stay above 1.0800 before a sustained rise is likely. The likelihood of EUR breaking clearly will remain intact as long as it stays above 1.0680 in the next couple of days. Looking ahead, the next resistance level above 1.0800 is at 1.0850.”