FX Strategists at UON Group Lee Sue Ann and Quek Ser Leang suggested that further upside in EUR/USD could reach the 1.0600 region in the next weeks.

Key Quotes

24-hour view: “While we expected a higher EUR yesterday, we were of the view that it ‘is unlikely to break the strong resistance at 1.0490’. However, EUR easily took out 1.0490 as it surged to a high of 1.0555. The swift build-up in momentum is likely to lead to further EUR strength. That said, a clear break of 1.0600 appears unlikely (next resistance is at 1.0640). On the downside, a breach of 1.0490 (minor support is at 1.0520) would indicate that the build-up in momentum has eased.”

Next 1-3 weeks: “We highlighted yesterday (17 May, spot at 1.0440) that downward momentum is beginning to ease but only a breach of 1.0490 would indicate that EUR is unlikely to break 1.0340. We did not expect the strong lift-off that resulted in an outsized gain as EUR closed higher by 1.11% (close of 1.0547), its largest 1-day advance in two months. The price actions appear to be part of a corrective rebound. The rebound could extend to 1.0600, possibly testing the major resistance at 1.0645. The current upward pressure is intact as long as EUR does not move below the ‘strong support’ level, currently at 1.0440.”