There is room for Euro (EUR) to rise further; it remains to be seen whether it can break clearly above 1.1720. In the longer run, upward momentum is building, but EUR must close above 1.1720 before a move toward 1.1760 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Upward momentum is building

24-HOUR VIEW: "We expected EUR to 'rise gradually and test 1.1680' yesterday. However, we pointed out that 'a continued rise above this level is unlikely, and the major resistance at 1.1720 is not expected to come into view.' We were not wrong, even though the advance was more resilient than expected, as EUR rose to a high of 1.1694 and then closed on a firm note at 1.1687 (+0.35%). The increasing upward momentum suggests that there is room for EUR to rise further today. However, it remains to be seen whether it can break clearly above the major resistance at 1.1720. To keep the momentum going, EUR must hold above 1.1650, with minor support at 1.1675."

1-3 WEEKS VIEW: "Yesterday (16 Oct, spot at 1.1645), we highlighted that 'the weakness in EUR from early last week has stabilised.' We also highlighted that EUR 'is likely to trade between 1.1575 and 1.1720 for now.' We did not expect EUR to move toward 1.1720 so quickly, as it rose to a high of 1.1694 and then closed higher for the third straight day. Upward momentum is building, but EUR must break and close above 1.1720 before a move toward 1.1760 can be expected. The likelihood of EUR breaking clearly above 1.1720 will remain intact as long as it holds above the ‘strong support’ level, now at 1.1625."