EUR/USD: extension to 1.12 is on the cards – UOB

FX Strategists at UOB Group have noted the rally in the pair could extend towards the 1.1200 handle in the near term.

Key Quotes

“We indicated yesterday that “a NY closing above 1.1020/25 would shift the outlook for EUR to bullish again with an immediate target of 1.1100”.

“The frenetic pace of the rally came as a surprise as the current level of 1.1085 is not far from 1.1100 (high has been 1.1097 at the time of writing). While the rally appears to be running ahead of itself, strong and impulsive momentum suggests that there is scope for extension to 1.1200”.

“In view of the outsized decline in EUR after the US election in November last year, resistances are few and far apart and a break above 1.1200 would shift the focus to the 1.1300, the high seen on the day of election. In order to maintain the current impulsive momentum, any short-term pullback is expected to be shallow and brief. From here, a move below 1.1000 is enough to indicate that an interim top is in place”.