There is room for the Euro (EUR) to edge higher, but it is unlikely to be able the break the major resistance at 1.1200. In the longer run, the likelihood of EUR breaking above 1.1200 has increased, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
Bulls may target 1.1200 in the longer run
24-HOUR VIEW: “EUR traded choppily two days ago. Yesterday, we indicated that ‘despite the choppy price action, the underlying tone seems to have softened somewhat,’ and we expected it to ‘trade in a lower range of 1.1080/1.1140.’ The subsequent price movements did not turn out as we anticipated. EUR dropped briefly to 1.1067 and then soared to 1.1178, closing on a firm note at 1.1161 (+0.39%). Upward momentum has increased slightly. Today, there is room for EUR to edge higher, but it is unlikely to be able to break the major resistance at 1.1200. Support levels are at 1.1130 and 1.1110.”
1-3 WEEKS VIEW: “Two days ago (17 Sep, spot at 1.1125), we highlighted that EUR ‘is likely to continue to rise, but it is unclear at this time if it has sufficient momentum to break above the year-to-date high, near 1.1200.’ After EUR popped briefly to 1.1189, we indicated yesterday (19 Sep, spot at 1.1125) that ‘it is still unclear for now if EUR can break above 1.1200.’ We added, ‘only a breach of 1.1060 (‘strong support’ level) would indicate that the potential for EUR to rise above 1.1200 has dissipated.’ EUR dropped to 1.1067 in Asian trading and then rebounded, reaching a high of 1.1178. There has been a slight increase in momentum, and the likelihood of EUR breaking above 1.1200 has increased as well. However, it remains to be seen if EUR has enough momentum to reach the next resistance at 1.1230. On the downside, the ‘strong support’ level remains unchanged at 1.1060 for now.”
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