Set to rise above 1.1200 – UOB Group

Chance for the Euro (EUR) to rise above 1.1200. There does not appear to be enough momentum for it to reach 1.1230 today. In the longer run, firm short-term momentum suggests EUR could rise towards 1.1230, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

EUR can rise towards 1.1230

24-HOUR VIEW: “After EUR fell sharply two days ago, we indicated that ‘the sharp drop appears to be a tad overdone, but barring a breach of 1.1150, there is room for EUR to test the 1.1080 level’. Our view was incorrect, as EUR rebounded strongly to 1.1180. Today, there is a chance for EUR to rise above 1.1200, but there does not appear to be enough momentum for it to reach 1.1230. Support is at 1.1165, a breach of 1.1145 would mean that the current upward pressure has faded.”

1-3 WEEKS VIEW: “EUR fell sharply two days ago. Yesterday (24 Sep, 1.1110), we indicated that EUR ‘is likely to edge lower, but any decline is expected to face strong support at 1.1050.’ We pointed out that ‘to maintain the momentum buildup, EUR must remain below 1.1175.’ Our view was invalidated quickly as EUR reversed and rebounded to 1.1180. While the choppy swings over the past couple of days has clouded the outlook, firm short-term momentum suggests EUR could rise towards 1.1230. EUR has to break clearly above this level before an advance to 1.1275 can be expected. The upside bias is intact as long as it remains above 1.1110.”