There is scope for Euro (EUR) to test the 1.1655 level again; the next resistance at 1.1685 is unlikely to come under threat. In the longer run, EUR is expected to trade with an upward bias towards 1.1685; it is too early to determine whether it can break clearly above this level, Société Générale’s FX analysts note.
EUR is expected to trade with an upward bias
24-HOUR VIEW: “Our view of range trading yesterday was incorrect, as EUR soared to a high of 1.1655. While the sharp rise appears excessive, there is scope for EUR to test the 1.1655 level again. The next resistance at 1.1685 is unlikely to come under threat. Support is at 1.1615; a breach of 1.1600 would indicate that the current upward pressure has eased.”
1-3 WEEKS VIEW: “We have expected EUR to trade in a range since late last week. In our most recent narrative from Wednesday (12 Nov, spot at 1.1585), we highlighted that we ‘continue to expect range-trading, but now anticipate a narrower range of 1.1520/1.1610’. Yesterday, EUR broke above 1.1610 and reached a high of 1.1655. Upward momentum has increased, but not significantly. From here, we expect EUR to trade with an upward bias towards 1.1685. Currently, it is too early to determine whether EUR can break clearly above this level. To sustain the upward momentum, EUR must hold above the ‘strong support’ level, now at 1.1575.”