Further upside in EUR/USD appears likely in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: We noted yesterday that “the current price action is likely part of a consolidation phase” and we expected EUR to trade sideways between 1.1190 and 1.1250. Our view of sideways trading was not wrong, even though EUR traded in a narrower range than expected (1.1202/1.12448). We continue to expect EUR to trade sideways. However, the underlying tone has firmed a tad, and EUR is likely to trade in a higher range of 1.1215/1.1265. 

Next 1-3 weeks: There is not much to add to our update from last Friday (14 Jul, spot at 1.1225). As indicated, while EUR could rise further, it is premature to expect a move to the 2022 high of 1.1495. Meanwhile, any further advance could face considerable resistance at 1.1300 and 1.1400. On the downside, a breach of the ‘strong support’ at 1.1160 (level previously at 1.1145) would indicate that the EUR strength that started last Monday has come to an end.