United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has broken above prior resistance, with rapid gains seen up to 1.1482. Intraday, the pair is seen capable of testing 1.1490 while staying below significant resistance at 1.1520. Over the next 1–3 weeks, upward momentum is building quickly, with an upside bias as long as 1.1405 strong support holds.

Rapid gains support constructive outlook

"24-HOUR VIEW: EUR popped to a high of 1.1462 two days ago before retreating quickly. When EUR was at 1.1425 yesterday, we stated that “the brief rise did not result in any significant increase in momentum,” and we expected it to “trade in a range between 1.1390 and 1.1455.” Our assessments turned out to be incorrect. EUR initially dropped to 1.1405 before rising sharply to 1.1482. While the rapid rise appears to be running ahead of itself, there is scope for EUR to test 1.1490. We do not expect the significant resistance at 1.1520 to come into view. Support is at 1.1450; a breach of 1.1435 would mean that the immediate upward pressure has eased."

"1-3 WEEKS VIEW: Two days ago (14 Jul, spot at 1.1385), we detected a slight increase in downward momentum. However, we pointed out that EUR “must close below 1.1360 before a move to 1.1325 can be expected.” After EUR broke above our ‘strong resistance’ level, we highlighted yesterday (15 Jul, spot at 1.1425) that “the mild downward momentum has eased, and EUR has likely reverted into a range-trading phase, most likely between 1.1390 and 1.1475.” We did not expect EUR to break above 1.1475 so soon as it soared to a high of 1.1482. Upward momentum is building quickly, and from here, as long as 1.1405 (‘strong support’ level) is not breached, EUR is likely to trade with an upside bias. Currently, it is too early to determine whether there is sufficient momentum for EUR to reach the significant resistance level at 1.1520."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)