Risk appears to be tilted to the upside; it remains to be seen if it can break clearly above 1.0850. Risk of the Euro (EUR) breaking above 1.0850 has increased, albeit moderately, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

A break above 1.0850 is highly likely

24-HOUR VIEW: “EUR traded between 1.0809 and 1.0830 yesterday, narrower than our expected range of 1.0800/1.0840. Despite the relatively quiet price action, upward momentum appears to be building, albeit tentatively. The risk for today appears to be tilted to the upside, but it remains to be seen if EUR can break clearly above the major resistance at 1.0850. However, if there is a clear break of 1.0850, EUR could continue to rise. That said, the next major resistance at 1.0915 is unlikely to come into view for now. On the downside, support levels are at 1.0815 and 1.0800.”

1-3 WEEKS VIEW: “Last Thursday (04 Jul, spot at 1.0785), we indicated that ‘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.’ After EUR rose, we indicated on Monday (08 Jul, spot at 1.0825) that ‘the risk of EUR breaking above 1.0850 has increased, albeit moderately.’ We continue to hold the same view. Looking ahead, if EUR breaks clearly above 1.0850, the next level to focus on is 1.0915. Overall, only a breach of 1.0780 (‘strong support’ level previously at 1.0770) would indicate that the current upward pressure has faded.”