According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research, EUR/USD needs to clear 1.0050 to allow for a sustained upside.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘could strengthen further but it is left to be seen if it can break the solid resistance at 1.0050’. However, 1.0050 did not come into view as EUR dropped sharply to a low of 0.9833 in NY trade before rebounding. Upward pressure has eased and EUR appears to have moved into a consolidation phase and is likely to trade between 0.9835 and 0.9960.”

Next 1-3 weeks: “Yesterday (05 Oct, spot at 0.9985), we indicated that while the risk for EUR has shifted to the upside, EUR ‘has to clear the significant and solid resistance at 1.0050 before further sustained advance is likely’. EUR subsequently dropped sharply and edged a couple of pips below our ‘strong support’ level at 0.9835 (low of 0.9833). We continue to hold the same view for now but a breach of 0.9800 would indicate that EUR is not ready to head higher to 1.0050.”