EUR/USD: Upside bias mitigated below 1.0940 – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest the upside momentum in EUR/USD is expected to lose traction below 1.0940.

Key Quotes

24-hour view: “EUR traded between 1.0998 and 1.1053 yesterday, narrower than our expected range of 1.0980/1.1060. The underlying tone has softened somewhat and EUR is likely to edge lower today. However, any decline is unlikely to break 1.0970. Resistance is at 1.1025, a breach of 1.1045 would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “Our update from last Friday (05 May, spot at 1.1025) still stands. As highlighted, the bias for EUR appears to be tilted to the upside but unless there is a clear improvement in momentum, any advance might find it difficult to break above the major resistance at 1.1120. Note that there is another rather strong resistance level near 1.1095. If EUR were to break below 1.0940 (‘strong support’ level was at 1.0920 last Friday), it would suggest that it is not ready to move towards 1.1120.”