Instead of continuing to rise, the Euro (EUR) is more likely to trade in a sideways range of 1.0750/1.0815, but increase in momentum suggests further EUR strength. It is too early to determine if it can reach the major resistance at 1.0850, UOB Group analysts Quek Ser Leang and Peter Chia note.

Rangebound for the time being

24-HOUR VIEW: “Yesterday, we held the view that EUR ‘is expected to drift higher.’ We were also of the view that ‘any advance is unlikely to reach the major resistance at 1.0785.’ However, EUR broke above 1.0785, soared to 1.0816, and then pulled back to close at 1.0786 (+0.39%). The sharp and swift rally appears to be overdone. This combined with overbought conditions suggests that instead of continuing to rise, EUR is more likely to trade in a sideways range of 1.0750/1.0815.”

1-3 WEEKS VIEW: “In our latest narrative from Monday (01 Jul, spot at 1.0735), we highlighted that EUR 'is likely to trade in a range for now, probably between 1.0680 and 1.0785.' We did not anticipate the ease in which EUR broke above 1.0785 yesterday, as it soared to a high of 1.0816. While the increase in momentum suggests further EUR strength, it is too early to determine if it can reach the major resistance at 1.0850. All in all, we will hold a slightly positive EUR view as long as it remains above the ‘strong support’ level, currently at 1.0730.”