EUR/USD faces a potential move to 1.1685 – UOB

In opinion of FX Strategists at UOB Group, EUR/USD is seen accelerating the upside on a breakout of 1.1635.

Key Quotes

24-hour view: “Yesterday, we indicated that ‘there is chance for EUR to edge above 1.1600 but as upward momentum is overstretched, a sustained advance above this level is unlikely (next resistance is at 1.1635)’. EUR subsequently rose to a high of 1.1626 before easing off to end the day at 1.1594 (+0.22%). While conditions remain overbought, EUR could continue to move higher even though the prospect for a break of 1.1635 is still not high. That said, a clear break of this critical resistance could potentially lead to a rapid rise towards 1.1685. Overall, only a break of 1.1540 would indicate that the current upward pressure has eased (minor support is at 1.1570).”

Next 1-3 weeks: “EUR registered the fifth straight day of ‘higher high’, ‘higher low’ and ‘higher close’ as it traded between 1.1538 and 1.1626 before closing at 1.1594 (+0.22%). As highlighted yesterday (23 Jul, spot at 1.1565), ‘a clear break of 1.1600 would not be surprising and would shift the focus to another major level at 1.1635’. While upward momentum remains strong, 1.1635 is major long-term resistance and this level may not be easy to crack. That said, a clear breach of this level could potentially lead to a rapid advance towards 1.1685, even as high as 1.1750. On the downside, a break of 1.1500 (‘strong support’ level was at 1.1465 yesterday) would indicate the current positive phase in EUR has run its course.”