EUR/USD could re-visit the 1.1845 level – UOB

FX Strategists at UOB Group note gains in EUR/USD are likely to re-test the mid-1.1800s in the next weeks.

Key Quotes

24-hour view: “The strong surge in EUR last Friday came as a surprise (we were expecting EUR to consolidate). While already in overbought territory, the advance in EUR has room to test 1.1820. For today, the next resistance at 1.1845 is unlikely to come under threat. Support is at 1.1780 followed by 1.1760.”

Next 1-3 weeks: “Last Thursday (12 Aug, spot at 1.1740), we highlighted that ‘downward momentum is beginning to wane and a break of 1.1775 would indicate that EUR is not ready to take out 1.1700 just yet’. EUR soared to 1.1804 last Friday and downward momentum has dissipated. The current movement is viewed as part of a corrective rebound and EUR could edge higher to 1.1845. At this stage, the prospect for a sustained advance above this level is not high. On the downside, a breach of 1.1735 (‘strong support’ level) would indicate that the current upward pressure has eased.”