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EUR/USD: The bounce faces strong resistance at 1.0735 – UOB

Lee Sue Ann, UOB Group Economist, and Quek Ser Leang, Market Strategist, come to the EUR/USD rallying in the coming weeks.

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24 hour view: “EUR/USD fell to a low of 1.0482 last Friday before taking flight and closing with a strong rise of 1.18% (at 1.0644). Although overbought, the sharp rally still shows no signs of weakening. There is room for for EUR/USD to break above 1.0685 before easing. The next resistance at 1.0715 is not expected to come into play today. Support is at 1.0615, followed by 1.0580.”

Next 1-3 weeks: “Last Friday (Jan 6, EUR/USD at 1.0520), we indicated that EUR/USD could weaken to the next support at 1.0450 and possibly 1.0410. The sudden momentum in the American session sent EUR/USD up to a 1.0647 high. The break of our “strong resistance” at 1.0630 indicates that our view of further EUR/USD weakness is wrong. Despite the strong rally, bullish momentum has not improved much. That being said, it is likely that EUR/USD trades with a bullish bias from here, despite last month’s high at 1.0735 being solid resistance and the chances of a sustained rally above this level are not high at this point. The bullish bias is intact as long as EUR/USD remains above 1.0535.”

Source: Fx Street

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