The economist Lee Sue Ann and the market strategist Quek Ser Leang, from Global Economics & Markets Research of the UOB Group, suggest that the EUR/USD will face sustained gains once 1.0050 is broken.
24 hour outlook: “Last Friday (Sep 30, pair at 0.9825) we highlighted that Euro weakness had stabilized and we expected the Euro to consolidate and trade between 0.9630 and 0.9950. Yesterday (Oct 04), Euro spiked and gained a whopping 1.62% (NY close 0.9983), its biggest one-day advance since 2016. The break of resistance at 0.9950, combined with the bullish momentum, has shifted risk to the upside in the euro. there is a significant and solid resistance at 1.0050 and the euro needs to overcome this hurdle before further sustained advance is likely. Overall, only a breakout of the strong support level, currently at 0.9835, would indicate that the euro’s upside risk has dissipated.”
Next 1 to 3 weeks: “Yesterday we saw that the underlying tone had firmed up a bit and while we were expecting the euro to rise, we remained of the view that any advance would likely be limited to a test of 0.9875. In other words, we did not expect the euro to rally until a high of 0.9999.The strong recovery is very overbought but there are no signs that it is going to ease, so it is not ruled out that the euro continues to rise. 1.0050 is a major and solid resistance and it remains to be seen if the Euro can break above this level. Support is at 0.9945, but only a break of 0.9915 would indicate that the current strong bullish pressure has eased.”
Source: Fx Street
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