EUR/USD looks former, now focuses on 1.2290 – UOB

In opinion of FX Strategists at UOB Group, EUR/USD could attempt a move to 1.2290 once 1.2240 is cleared.

Key Quotes

24-hour view: “While our view for EUR to strengthen yesterday was correct, we did not anticipate the swift and sharp rise to 1.2233 (we were of the view that 1.2200 unlikely to come into the picture). Momentum remains strong and a break of 1.2240 would not be surprising. However, EUR is unlikely to challenge the next major resistance at 1.2290 (there is another minor resistance at 1.2265). Support is at 1.2200 but only a breach of 1.2180 would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “On Monday (17 May, spot at 1.2140), we highlighted that ‘upward momentum is lackluster and EUR has to close above the major resistance at 1.2180 before a sustained advance can be expected’. We added, ‘the next resistance levels above 1.2180 are at 1.2200 and 1.2240’. We did not anticipate the sudden and strong surge in EUR yesterday that sent it soaring to 1.2233. Rapid improvement in momentum indicates that a break of 1.2240 would not be surprising. The next level to focus on above 1.2240 is at 1.2290. The current EUR strength is deemed intact as long as it does move below 1.2145 (‘strong support’ level previously at 1.2065).”