The continuation of the upside bias could lift EUR/USD to the key 1.1000 region in the next few weeks, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
24-hour view: We highlighted yesterday that “further EUR strength appears likely, but a sustained rise above 1.0945 is unlikely.” We added, “the next major resistance at 1.1000 is also unlikely to come into view.” Our view was not wrong, as EUR rose to a high of 1.0951 before settling at 1.0938 (+0.28%). Upward momentum has increased, albeit not much. Today, the risk is still for a higher EUR, even though it may not have enough momentum to reach 1.1000. Support is at 1.0920; a breach of 1.0900 would mean that the upside risk has eased.
Next 1-3 weeks: Last Wednesday (15 Nov, spot at 1.0880), we highlighted that “further EUR strength appears likely, and the level to monitor is 1.0945.” Yesterday (20 Nov, spot at 1.0905), we highlighted that EUR is likely to strengthen further, and if it breaks above 1.0945, the next level to watch is 1.1000. EUR then broke above 1.0945 in NY trade (high of 1.0951). We continue to expect EUR to strengthen, and as indicated, the next to watch now is 1.1000. Looking ahead, a breach of 1.1000 will shift the focus to 1.1065. On the downside, the ‘strong support’ level has moved higher to 1.0860 from 1.0820. If EUR breaks below the ‘strong support’, it would mean that it is not strengthening further.