Economist Lee Sue Ann and Markets Strategist Quek ser Leang at UOB Group maintain the short-term positive outlook for EUR/USD.

Key Quotes

24-hour view: We highlighted yesterday that “there is a chance for EUR to retest the 1.0825 level”. We were also of the view that “the major resistance at 1.0850 is likely out of reach”. The anticipated EUR strength exceeded our expectations as it soared to 1.0863 before pulling back to end the day at 1.0831 ( 0.37%). The pullback in overbought conditions suggest EUR is unlikely to rise further. Today, it is more likely to trade in a range of 1.0775/1.0866. 

Next 1-3 weeks: Last Friday (09 Jun, spot at 1.0780), we noted that “upward momentum is building tentatively but it is not clear for now if EUR has enough momentum to rise to 1.0850”. After EUR rose, we highlighted yesterday (14 Jun, spot at 1.0790) that “the odds of EUR rising to 1.0850 have increased”. In NY trade, EUR soared to a high of 1.0863, and upward momentum has improved further. In other words, the outlook for EUR is still positive. The next level to aim for is 1.0900. In view of the overbought conditions, it may take a few days before this level comes into view. Overall, only a breach of 1.0755 (‘strong support’ level was at 1.0730) would suggest EUR is advancing further.