EUR/USD: Resistance at 1.0480 is unlikely to come under threat for now – UOB Group

Potential for Euro (EUR) to rise above 1.0440; the significant resistance at 1.0480 is unlikely to come under threat for now. Current price action is part of a recovery phase that could extend to 1.0480, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current price action is part of a recovery phase

24-HOUR VIEW: “After trading in a range for a few days, EUR lifted off during NY session, surging to a high of 1.0434. While the impulsive momentum suggests further EUR strength, any advance could be relatively limited due to deeply overbought conditions. Overall, there is potential for EUR to rise above 1.0440, but the significant resistance at 1.0480 is unlikely to come under threat for now. Support levels are at 1.0385 and 1.0350.”

1-3 WEEKS VIEW: “We revised our view to neutral last Wednesday (15 Jan, spot at 1.0300), indicating that EUR ‘has likely entered a range trading phase, and it is likely to trade between 1.0220 and 1.0400 for the time being.’ EUR subsequently traded in a range, and yesterday (20 Jan, spot at 1.0275), we indicated that ‘further range is likely, but given the decreasing volatility, we expect price movements to be confined to a narrower range of 1.0220/1.0365 for now.’ We did not expect EUR to lift off and blew past 1.0365. EUR closed sharply higher by 1.39% (1.0414). The current price action is likely part of a recovery stage that could extend to 1.0480. Should EUR break above 1.0480, it could lead to a more sustained and sizeable advance. We will view EUR favourably from here, as long as 1.0305 (‘strong support’ level) is not breached.”