In light of the recent price action, EUR/USD could now advance to the 1.1180 region in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We noted yesterday that ‘the underlying tone has firmed’ and we expected EUR to ‘edge higher’. While our view for a higher EUR turned out to be correct, we did not expect the ease by which it took out the 1.1080 resistance and the subsequent rapid rise to 1.1137. The pullback from the high has dented the upward momentum and EUR is unlikely to strengthen much further. For today, EUR is more likely to trade between 1.1055 and 1.1140.”

Next 1-3 weeks: “Yesterday (17 Mar, spot at 1.1030), we highlighted that shorter-term upward momentum has improved somewhat and EUR could rise above 1.1080. We added, ‘looking ahead, EUR has to break 1.1120 before a sustained advance is likely’. While our view was not wrong, we did not quite expect to EUR to break both 1.1080 and 1.1120 so quickly (high of 1.1137). The rapid improvement in momentum suggests EUR could advance to 1.1180, possibly 1.1200. Support is at 1.1055 but only a breach of 1.1025 (‘strong support’ level was at 1.0920 yesterday) would indicate that the current upward pressure has eased.”