EUR/USD embarked in another leg higher – UOB

FX Strategists at UOB Group noted another leg higher in spot is in the offing.

Key Quotes

24-hour view: “Expectation for EUR to trade sideways was wrong as it staged a surprisingly robust rally that hit an overnight high of 1.2522. Upward momentum remains strong and from here, a move above last week’s 1.2536 peak would not be surprising. However, the next resistance at 1.2570 could be out of reach for the time being. Support is at 1.2470 followed by 1.2430. Further down, yesterday’s low of 1.2385 is acting as a rather key support now”.

Next 1-3 weeks: “We highlighted that EUR has to “stage the next ‘leg’ higher soon (say by end of this week) or the risk of an interim top would grow quickly”. The subsequent strong surge higher is viewed as the start of the next ‘up-leg’ within the current bullish phase. From here, a break of last week’s 1.2536 peak would shift the focus to 1.2570 followed by 1.2660. On the downside, the ‘stop-loss’ level is raised higher to 1.2335 from 1.2290. A break of 1.2335 would indicate that the bullish phase that started about 3 weeks ago has ended”.