UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann see a rising probability that EUR/USD could break above the 0.9900 level in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that EUR is likely to strengthen further even though we noted that ‘in view of the overbought conditions, a sustained rise above 0.9900 is unlikely’. However, EUR did not strengthen much as it edged to a 2-week high of 0.9875 before settling at 0.9852 (+0.14%). Despite the relatively quiet price actions, the underlying tone appears firm and EUR is likely to edge higher for today. That said, a sustained rise above 0.9900 still appears unlikely (next resistance is at 0.9950). Support is at 0.9840, but only a break of 0.9820 would indicate that the upward pressure has eased.”

Next 1-3 weeks: “Our update from yesterday (18 Oct, spot at 0.9845) still stands. As highlighted, upward momentum is beginning to build and the risk of EUR breaking above 0.9900 is increasing. The chance of a clear break above 0.9900 will continue to increase as long as EUR does not move below 0.9770 (‘strong support’ level was at 0.9730 yesterday) within the next couple of days. Looking ahead, a clear break of 0.9900 will shift the focus to 0.9950, a critical resistance level.”