FX Strategists at UOB Group noted EUR/USD is now targeting the 1.20 mark and beyond.
Key Quotes
24-hour view: “While we expected EUR to strengthen yesterday, the ease by which it blew past the month-to-date peak at 1.1915 and the subsequent surge to an overnight high of 1.1965 came as a surprise. From here, further gains are not ruled out but severely overbought conditions indicate that a sustained rise above 1.2000 is unlikely (next resistance is at 1.2040). Support is at 1.1915 but only a breach of 1.1880 would indicate the current advance in EUR is ready to take a breather.”
Next 1-3 weeks: “We highlighted yesterday (18 Aug, spot at 1.1875) that ‘only a NY closing above 1.1915 would indicate the start of a fresh positive phase’. We added, ‘for now, the prospect for EUR to move clearly above 1.1915 is not high but it would increase quickly unless EUR moves and stays below 1.1815 within these few days’. In other words, the rapid manner by which EUR soared to a high of 1.1965 was not exactly expected. Now, that EUR has cleared 1.1915, the next level to focus on is at 1.2000 followed by 1.2080. The ‘strong support’ level has moved higher to 1.1840 from yesterday’s level of 1.1815.”