FX Strategists at UOB Group noted EUR/USD could still edge higher to the 1.1070 region in the next weeks.
24-hour view: “After soaring to a high of 1.1017 last Friday, the rapid and sharp retreat in EUR yesterday was not expected. The swift pullback appears to be running ahead of itself and while EUR could edge lower from here, it is unlikely to threaten the strong support at 1.0870. Resistance is at 1.0935 followed by 1.0960.”
Next 1-3 weeks: “While EUR traded on a firm note late last week, it gave up a large part of its gains as it slipped by -0.70% (NY close of 1.0906). The pullback has dented the upward momentum but for now, we are holding on to our view from yesterday (04 May, spot at 1.0955). As highlighted, the rapid rise from late last week appears to have room to test the 1.1070 level. However, a break of 1.0870 (no change in ‘strong support’ level) would indicate that EUR is not ready to move higher just yet. Meanwhile, in order to rejuvenate the current flagging momentum, EUR has to move and stay above 1.0960 within these 1 to 2 days or a breach of the ‘strong support’ would not be surprising.”