EUR/USD unlikely to surpass 1.18 near term – UOB

In opinion of FX Strategists at UOB Group, the pair’s near term stance remains bullish although a breakout of the 1.1800 handle is now unlikely.

Key Quotes

“Expectation for a deeper pull-back was wrong as EUR rallied to hit a high of 1.1763 last Friday. The up-move appears incomplete and a move above last week’s high of 1.1776 would not be surprising but based on the current momentum, a sustained move above the major 1.1800 level is unlikely, at least for today. Support is at 1.1715 but only a move back below 1.1685 would indicate that the immediate upward pressure has eased”.

“As indicated, we are aware of the current overbought conditions and in order to maintain the bullish impetus, EUR has to continue to march higher. While the strong daily closing in NY is encouraging, 1.1800 is a major resistance and a sustained move above this level seems unlikely for now (next resistance is at 1.1860). We have suggested 1.1490 as an entry level and 1.1660 as an exit level for half of long position. Those with remaining long should look to exit their position if there is a move higher to 1.1800. Stop-loss remains unchanged at 1.1630 for now even though 1.1685 is already a strong shorter-term support”.