FX Strategists at UOB Group noted EUR/USD is now predicted to advance beyond the 1.1900 yardstick in the next weeks.
24-hour view: “While we expected EUR to strengthen yesterday, we were of the view that ‘1.1895 is not expected to come under threat’. Our view was not wrong even though EUR came within a few pips of 1.1895 as it touched 1.1892 during late NY hours. The advance is in overbought territory but with no signs of weakness just yet, EUR edge higher to 1.1915. A break of the next resistance at 1.1945 would come as a surprise. Support is 1.1865 followed by 1.1845. A break of 1.1845 would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “We turned positive on EUR yesterday (29 Jul, spot at 1.1845). We highlighted that ‘mild upward pressure could lead to a higher EUR but any advance is expected to face solid resistance at 1.1895’. While our view for a stronger EUR was not wrong, we did not quite anticipate the rapid manner by which EUR approaches 1.1895 (overnight high of 1.1892). Upward momentum has improved further and EUR could continue to advance towards 1.1915, possibly 1.1945. On the downside, a break of 1.1825 (‘strong support’ level was at 1.1770 yesterday) would indicate that the current upward pressure has eased.”