Euro (EUR) could test 1.0950 vs US Dollar (USD), but it does not appear to possess enough momentum to break clearly above this level. In the longer run, EUR must break and close above 1.0950 before resuming its rally, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Above 1.0950, EUR can resume its rally
24-HOUR VIEW: “We did not anticipate EUR rising to 1.0929 yesterday. We were expecting range trading. Despite the relatively strong advance, upward momentum has not increased significantly. That said, there is no sign of an imminent pullback just yet. Today, EUR could test last week’s high, near 1.0950. Currently, it does not appear to possess enough momentum to break clearly above this level. The next major resistance at 1.1000 is unlikely to come under threat. Support is at 1.0905; a breach of 1.0885 would suggest the current upward pressure has eased.”
1-3 WEEKS VIEW: “In our update from last Friday (14 Mar, spot at 1.0850), we highlighted that ‘the current price movements are likely part of a consolidation phase’ and EUR ‘is likely to trade in a 1.0680/1.0950 range for now.’ Yesterday, EUR rose to 1.0929. The increase in short-term momentum is not sufficient to indicate that EUR is ready to resume its rally. For that to happen, EUR must break and close above 1.0950. The probability of EUR breaking clearly above 1.0950 is not high for now, but it will remain intact as long as 1.0855 (‘strong support’ level) is not breached.”
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