Bias for Euro (EUR) is tilted to the upside; it does appear to have enough momentum to break above 1.1720. In the longer run, upward momentum is starting to build; the probability of EUR breaking above 1.1720 is increasing, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR is tilted to the upside
24-HOUR VIEW: “After EUR rose more than we expected last Thursday, we indicated on Friday that ‘while momentum continues to suggest upside potential in EUR, with negative divergence forming, any further advance may not reach the major resistance at 1.1720.’ We noted that ‘there is another resistance level at 1.1700.’ We also pointed out that ‘to keep the momentum going, EUR must hold above 1.1645, with minor support at 1.1660.’ EUR subsequently dipped to 1.1649, rebounded to 1.1708, and then eased to close largely unchanged at 1.1684 (+0.02%). Although the bias for today remains tilted to the upside, EUR does not appear to have enough momentum to break above 1.1720. Support is at 1.1665, followed by 1.1645.”
1-3 WEEKS VIEW: “We have expected EUR to trade in a range since early last week. Last Thursday (28 Aug, spot at 1.1640), we indicated that ‘we continue to expect range-trading but now expect a narrower range of 1.1580/1.1720.’ After EUR rose to a high of 1.1697, we indicated on Friday (29 Aug, spot at 1.1680) that ‘short-term upward momentum is starting to build, and the probability of EUR breaking above 1.1720 is increasing, and it would continue to increase in the coming days as long as 1.1620 (‘strong support’ level) is not breached.’ We continue to hold the same view.”
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