EUR/USD could test the 1.1230 region near term – UOB

There is room for EUR/USD to move higher and visit the 1.1230 region in the short-term horizon, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that the “rebound in EUR has scope to extend but 1.1210 is expected to offer solid resistance”. EUR subsequently touched 1.1212 during late-NY hours before ending the day on a strong note (NY close of 1.1202). The current short-term EUR strength appears to be running ahead of itself but is not showing sign of weakness just yet. From here, we see scope for a test of 1.1230 first before the current EUR strength should ease off (the next resistance at 1.1265 is not expected to come into the picture). Support is at 1.1180 followed by 1.1160”.

Next 1-3 weeks: “We indicated last Friday (24 May) that the strong rebound ahead of the 1.1000 support suggests EUR may have found a short-term bottom at 1.1106 on Thursday (23 May). For now, we continue to hold the same view but if EUR were to close above the top of our expected sideway-trading range of 1.1130/1.1230, it would suggest the start of a stronger and more sustained recovery. The probability for such a move appears to be quite high as long as EUR can hold above 1.1260 within these 1 to 2 days”.