EUR/USD: Focus is now on 1.1050 – UOB

Markets Strategist Quek Ser Leang and Senior Economist Alvin Liew at UOB Group note EUR/USD could now head towards 1.1050 in the near term.

Key Quotes

24-hour view: We highlighted yesterday that EUR “is likely to edge higher to 1.0955 but the major resistance at 1.1000 is highly unlikely to come into view.” Our view was not wrong even though we did not quite anticipate the rapid increase in momentum as EUR soared to a high of 1.0990. The boost in momentum suggests a break of 1.1000 will not be surprising. The next major resistance at 1.1040 is likely out of reach today. In order to keep the momentum going, EUR must stay above 1.0940 (minor support is at 1.0965). 

Next 1-3 weeks: Yesterday (21 Jun, spot at 1.0920), we highlighted that upward momentum has waned somewhat and EUR “must break clearly above 1.0955 in the next 1-2 days or the chance for it to advance to 1.1000 will diminish quickly.” EUR then broke above 1.0955 and soared to 1.0990. The ‘rejuvenated’ momentum indicates there is room for EUR to head higher to 1.1050. Overall, only a breach of 1.0900 (‘strong support’ level was at 1.0860 yesterday) would indicate the EUR strength that started about two weeks ago has run its course.