In the opinion of Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann, further upside in EUR/USD could extend to the 1.0200 region in the next few weeks.
24-hour view: “We highlighted yesterday that ‘The strong boost in momentum suggests EUR is likely to strengthen further’. We added, ‘In view of the overbought conditions, EUR might not be able to maintain a foothold above 1.0000’. We underestimated the upward momentum as EUR rocketed to a high of 1.0088 before closing on a strong note at 1.0077 (+1.13%). While still overbought, the rally in EUR will likely continue. The level to monitor is at 1.0150. For today, the major resistance at 1.0200 is likely out of reach. On the downside, a break of 1.0020 (minor support is at 1.0050) would indicate that current strong upward pressure has eased.”
Next 1-3 weeks: “We turned positive on EUR two days ago (25 Oct, spot at 0.9885). After EUR rose, we highlighted yesterday (26 Oct, spot at 0.9960) that ‘there is a high chance of EUR breaking 1.0000’. We indicated, ‘The next resistance is at 1.0050’. While our view of a higher EUR is correct, we were not expecting the rapid pace of advance as EUR blew past both 1.0000 and 1.0050 yesterday. Needless to say, upward momentum is still strong and we continue to expect EUR to rise. The next level to monitor is at 1.0200. Only a breach of the ‘strong support’ at 0.9950 (level was at 0.9850 yesterday) would indicate that EUR is unlikely to advance further.”
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