EUR/USD looks firmer and focuses on 1.20 – UOB

EUR/USD keeps trading on a constructive bias and looks to a potential visit to the 1.20 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further advance in EUR would not be surprising’ but we were of the view that ‘a sustained rise above 1.1965 appears unlikely’. While EUR strengthen as expected, the advance did not quite move above 1.1965 (high of 1.1965). Upward momentum is showing early signs of waning and this coupled with overbought conditions suggests the risk of a sustained advance is not high for today. That said, there is room for EUR to edge above 1.1965 but barring a clear break of 1.2000, the prospect for a pullback would increase quickly. Support is at 1.1915 followed by 1.1890.”

Next 1-3 weeks: “Our latest narrative from last week was that EUR is still likely in a consolidation phase and ‘only a daily closing out of the 1.1740/1.1930 range would indicate that EUR is ready for a sustained directional move’. EUR popped to a high of 1.1919 on Friday and closed on a strong note at 1.1903 (+0.69%). While EUR did not close above 1.1930, upward momentum has improved considerably and from here, EUR is expected to trade with an upward bias towards the major resistance at 1.2000. For now, the odds for a sustained rise above this level are not high. On the downside, 1.1815 is acting as a ‘strong support’ level and only a break of this level would indicate that EUR is not ready to tackle 1.2000 just yet.”