EUR/USD could now re-test the 1.1835 level – UOB

FX Strategists at UOB Group noted EUR/USD is now poised to advance further north of the 1.180 mark in the next weeks.

Key Quotes

24-hour view: “Last Friday, we expected EUR to ‘trade sideways within a 1.1735/1.1775 range’. During NY session, EUR dropped briefly to 1.1733 before rocketing higher and took out the major resistance at 1.1800 (high of 1.1802). In view of the impulsive price actions, EUR could strengthen further. However, overbought conditions suggest that the next major resistance at 1.1835 is likely out of reach for now (minor resistance is at 1.1820). On the downside, 1.1760 is likely strong enough to hold any pullback (minor support is at 1.1780).”

Next 1-3 weeks: “We have held the same view since last Tuesday (24 Aug, spot at 1.1745) where we indicated that ‘the rebound in EUR has scope to extend to 1.1800’. We added, ‘at this stage, the odds for a sustained advance above 1.1800 are not high’. Our view was not wrong as EUR soared to a high of 1.1802 on Friday (27 Aug). Upward momentum has improved and we see room for the current EUR strength to extend to 1.1835. Only a break of 1.1735 (‘strong support’ level was at 1.1705 last Friday) would indicate that the current EUR strength has run its course. Looking ahead, the next resistance above 1.1835 is at 1.1865.”