In light of the recent price action, EUR/USD could extend the upside to the 1.0970 region in the next few weeks, noted Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: “The strong rise in EUR to a high of 1.0926 came as a surprise (we were expecting EUR to trade in a range). While overbought, the advance in EUR could break above the month-to-date high near 1.0930. In view of the overbought conditions, the next resistance at 1.0970 is unlikely to come into view today. Support is at 1.0880; a breach of 1.0865 would indicate that the upward pressure has faded.”

Next 1-3 weeks: “We have held the same view since Monday (27 Mar, spot at 1.0775) wherein EUR ‘appears to have entered a consolidation phase and it is likely to trade between 1.0660 and 1.0870’. We highlighted yesterday (30 Mar, spot at 1.0845) that ‘while short-term upward momentum has improved a tad, EUR has to break and stay above 1.0900 before a sustained advance is likely’. We added, ‘The prospect of EUR breaking clearly above 1.0900 is low for now, but it would remain intact as long as EUR stays above the ‘strong support’ level of 1.0770 in the next few days’. In early NY trade, EUR cracked 1.0900 and rose to 1.0926 before settling at 1.0901 (+0.53%). Upward momentum has improved further and EUR is likely to strengthen to 1.0970. On the downside, the ‘strong support’ level has moved higher to 1.0820 from 1.0770. Looking ahead, the next significant resistance above 1.0970 is at 1.1035.”