Provided that the Euro (EUR) remains above 1.0910, it could retest the 1.1010 level before another pullback is likely. EUR is still positive, but it has to surpass 1.1010 before further advance to 1.1070 can be expected, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Likely to test the 1.1010 level

24-HOUR VIEW: “We indicated yesterday that EUR ‘could continue to rise, but it is unlikely to break last month’s high near 1.0950.’ Our view of EUR rising was correct, but we did not anticipate the strong advance that reached a high of 1.1008. EUR pulled back from the high, closing on a strong note at 1.0952 (+0.40%). Conditions are overbought, but today, provided that EUR remains above 1.0910 (minor support is at 1.0930), EUR could retest the 1.1010 level before another pullback is likely.”

1-3 WEEKS VIEW: “After holding a negative EUR view for more than a week, we turned positive yesterday (05 Aug, spot at 1.0905), indicating that ‘there is a chance for EUR to advance further.’ We also indicated that ‘if it can break above 1.0950, it could trigger a rapid rise to 1.1000.’ While our view was not wrong, the rapid manner in which the price action developed was surprising. EUR broke above both 1.0950 and 1.1000 in London trade before pulling back from a high of 1.1008. We will continue to view EUR positively as long as 1.0855 (‘strong support’ level was at 1.0820) is not breached. That said, the 1.1010 level is solid resistance level now. EUR has to surpass this level before further advance to 1.1070 can be expected.”