EUR/USD bullish, now eyes 1.20 – UOB

In opinion of FX Strategists at UOB Group, EUR/USD could edge towards the 1.20 handle in the next weeks.

Key Quotes

“Expectation for sideway-trading was wrong as EUR surged and hit an overnight high of 1.1909. Despite the quick and sharp pull-back from the high, the undertone is still positive and it is too early to expect a sustained down-move. EUR is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today; 1.1810/1.1900”.

“We indicated yesterday that unless EUR can ‘punch’ above 1.1845 within these few days, the odds for further upward extension would diminish. EUR not only took out this level but also the strong resistances at 1.1875 and 1.1900 (overnight high of 1.1909). Despite the swift pullback from the high, the bullish phase that started on 19 Jul is still intact. The next level to focus on is technically at 1.2000 but based on the current extreme over-stretched conditions, this level could be a bridge too far. On the downside, support is at 1.1810 followed by the stop-loss at 1.1770 (adjusted higher from 1.1720)”.