EUR/USD: Rising bets for a move to 1.1492 – UOB

EUR/USD is still seen testing the yearly highs near the 1.1500 mark in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, our view for EUR was that it ‘could edge above 1.1450 but the year-to-date high at 1.1492 is highly unlikely to come into the picture’. Our view was not wrong as EUR rose to a high of 1.1467, dropped sharply to 1.1400 before snapping back up again. Despite the choppy price actions, the underlying tone still appears firm and the risk for today is still for a higher EUR. That said, 1.1492 could be out of reach. On the downside, a breach of 1.1400 (minor support at 1.1425) would indicate the current tentative build-up in momentum has eased.”

Next 1-3 weeks: “We have held a positive outlook in EUR since last Wednesday (15 Jul, spot at 1.1410) but held the view that ‘the current momentum may not be enough to carry EUR above the year-to-date high of 1.1492’. As EUR struggled to extend higher, we cautioned last Friday (17 Jul, spot at 1.1385) that ‘upward momentum has been dented but there is still chance for EUR to move closer to 1.1492’. The waning upward momentum received a boost, albeit a minor one as EUR rose to high of 1.1467 yesterday (20 Jul) before settling slightly higher at 1.1444 (+0.16%). From here, the prospect for a break of 1.1492 has increased but in view of the still ‘tentative’ momentum, it is left to be seen if EUR can extend its gain to 1.1540. Overall, the positive outlook for EUR is deemed as intact unless there is a breach of 1.1375 (‘strong support’ level was previously at 1.1350).”