EUR/USD now targets 1.2040/45 – UOB

FX Strategists at UOB Group now are bullish on the pair, expecting a test of the 1.2040/45 band in the near term.

Key Quotes

24-hour view: “In line with expectation, EUR extended its gain but did not have enough momentum to challenge the major ‘round number’ resistance of 1.2000. The overnight up-move tested the minor resistance indicated yesterday at 1.1980 (high of 1.1983) before easing off. The upmove is severely is overbought now and while a test of 1.2000 is not ruled out, a clear break above this level is not expected. On the downside, only a move back below 1.1910 would indicate that the current strong upward pressure has eased (minor support is at 1.1930)”.

Next 1-3 weeks: “We just turned bullish EUR yesterday and there is no change to the view. As highlighted, the immediate target is for a break of the round number resistance of 1.2000. The next target is at 1.2040/45, the low back in July 2012. After the strong rise over the past few trading sessions, support levels are far apart and only a move back below 1.1840 (stop-loss level adjusted higher from 1.1800) would indicate that an interim top is in place. The buy levels suggested at 1.1890, 1.1850 yesterday were not met. Those still keen to enter long may use 1.1910/15 as entry level”.