To continue consolidation towards 1.1275 – UOB Group

The euro (EUR) may strengthen further against the US dollar (USD) towards 1.1225, but significant resistance at 1.1275 is unlikely to emerge today, notes UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.

EUR targets 2023 high of 1.1275

24 HOURS: “Last Friday, we expected the EUR to trade in a range between 1.1085 and 1.1155. EUR traded sideways until NY trade when it took off and touched 1.1200. EUR closed on a strong note at 1.1190 (+0.70%). While conditions are overbought, strong upside momentum suggests further EUR upside, likely towards 1.1225. The significant resistance level of 1.1275 is unlikely to emerge today. Support levels are at 1.1165 and 1.1145.”

WEEKS 1-3: “In our most recent narrative last Thursday (August 22 at 1.1155), we indicated that ‘solid momentum after recent price action points to likely EUR upside.’ However, we noted that “it remains to be seen whether the 2023 high of 1.1275 is within reach in the next two weeks.” Last Friday, the EUR rose to a high of 1.1200. The increase in momentum has increased the probability of the EUR reaching 1.1275. Overall, we will continue to have a positive view on the euro, provided that the “strong support” level at 1.1105 (previous level at 1.1045) is not breached.”