Instead of pulling back, the Euro (EUR) is more likely to trade in a range between 1.0800 and 1.0845. Risk of EUR breaking above 1.0850 has increased, albeit moderately, UOB Group analysts note.

EUR is set to break above 1.0850

24-HOUR VIEW: “While we expected EUR to edge higher last Friday, we indicated that ‘it remains to be seen if it can reach the major resistance at 1.0850.’ EUR subsequently edged to a high of 1.0842, closing at 1.0836 ( 0.24%). EUR fluctuated upon opening this morning, and upward momentum has not increased much further. That said, instead of pulling back, EUR is more likely to trade in a range today, probably between 1.0800 and1.0845.”

1-3 WEEKS VIEW: “Last Thursday (04 Jul, spot at 1.0785), we indicated that ‘while the increase in momentum suggests further EUR strength, it is too early to determine if it can reach the major resistance at 1.0850.’ On Friday, EUR rose, reaching a high of 1.0842. While there has been no significant increase in momentum, the risk of EUR breaking above 1.0850 has increased, albeit moderately. If EUR breaks clearly above 1.0850, the next level to monitor is 1.0900. Conversely, if EUR breaches 1.0770 (‘strong support’ level was at 1.0745 last Friday), it would mean that the current upward pressure has faded.”