The currency strategists of UOB Group suggest that the EUR / USD could generate more gains if it breaks above the 1.2010 zone in the coming weeks.
24 hour perspective: “We expected the EUR to strengthen yesterday, but noted that overbought conditions suggested a sustained rise above 1.1985 was unlikely. Our view was not wrong as the euro rose to 1.1987 during the New York hours earlier to negotiate laterally during the rest of the session. While conditions remain overbought, risk remains on the upside. That being said, any further advance in the euro is expected to face solid resistance at 1.2010. On the downside, a breakout of 1.1945 (minor support is 1.1960) would indicate that the current bullish pressure has eased. “
Next 1-3 weeks: “Not much to add to our update yesterday (April 14, even at 1.1950). As highlighted, ‘improved momentum is likely to lead to greater EUR strength and the next big resistance is at 1.2010’. Short-term overbought conditions could slow the pace of advance, but a break of 1.2010 would not be surprising. The next resistance is at 1.2065. On the downside, a breakout of 1.1915 (the ‘strong support’ level was at 1.1875 yesterday) would indicate that the strength of the euro that started early last week has run its course. “
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