EUR/USD: Next target emerges at 1.1010 – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest the next level to watch for EUR/USD is now at 1.1010 in the near term.

Key Quotes

24-hour view: Our view that EUR would trade in a range last Friday was incorrect, as it lifted off in NY trade and surged to a high of 1.0973. The strong surge appears to be overdone, but with no signs of weakness just yet, the EUR strength is likely to extend. In view of the overbought conditions, June’s high near 1.1010 is unlikely to come under threat today. In order to keep the momentum going, EUR must stay above 1.0925 (minor support is at 1.0945). 

Next 1-3 weeks: We have held a negative view in EUR since late last month. After EUR dropped to 1.0832 and rebounded, we highlighted last Friday (07 Jul, spot at 1.0895) that “if EUR breaks above 1.0925, it would suggest that 1.0805 is not coming into view.” In NY trade, EUR not only broke above 1.0925, but it also soared by 0.73% (NY close of 1.0967), its biggest 1-day gain in three weeks. The rapid increase in momentum is likely to lead to further advance in EUR. The level to watch is June’s high near 1.1010, followed by 1.1050. In order to maintain the buildup in momentum, EUR must stay above 1.0870 (current ‘strong support’ level) in the next few days.