UOB Group currency strategists Lee Sue Ann and Quek Ser Leang suggest that EUR/USD could now extend the recovery to the 1.0695 level.
Key comments
24 hour view: “We do not expect the strong rise in EUR/USD during the American session that sent it to a high of 1.0630. The strong advance has room to extend, but given the overbought conditions, a sustained rise is unlikely to be sustained by above 1.0665 (there is minor resistance at 1.0640). Support is found at 1.0590, followed by 1.0570″.
Next 1-3 weeks: “Yesterday (May 4, EUR/USD at 1.0520), we highlighted that a break of 1.0610 would suggest that 1.0470 is a short-term bottom. EUR/USD subsequently rose above 1.0610 as it reached a high of 1.0630 during the American session.While it is premature to expect a major reversal, the current short-term EUR/USD strength could extend to 1.0695.At this point, the odds of a breakout of this level are not high.On the downside, the ‘ strong support’ is at 1.0520. The 1.0470 level is unlikely to come into the picture, at least for several days, possibly even a couple of weeks.”
Source: Fx Street
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