Euro: Upside bias toward 1.1725 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report EUR/USD broke out of its recent tight range, closing slightly higher near 1.1675 as tentative upside momentum emerges. They maintain a constructive short-term and medium-term view, with room for gains toward 1.1725 and longer-term technical targets at 1.1800 and 1.1850, provided the Euro (EUR) holds above clearly defined support levels.

Tentative momentum supports higher levels

"24-HOUR VIEW: Two days ago, EUR traded between 1.1655 and 1.1687 and closed modestly lower by 0.15% at 1.1662. Yesterday, we indicated that “the price action provides no fresh clues, and further range-trading appears likely, expected to be between 1.1650 and 1.1685.” Our view of range-trading was wrong. EUR dipped to 1.1650, rose to 1.1679 before settling at 1.1674 (+0.10%). Upward momentum is starting to build, albeit tentatively. Today, there is a chance for EUR to test 1.1695. The next resistance at 1.1710 is unlikely to come under threat. Support is at 1.1665, followed by 1.1655."

"1-3 WEEKS VIEW: We have been holding a positive EUR view since early last week (as annotated in the chart below). In our most recent narrative from last Thursday (20 Aug, spot at 1.1675), we highlighted that “there is room for further upside in EUR toward 1.1725.” Although EUR has tested 1.1710 twice, it has not been able to make significant headway on the upside. That said, we will continue to hold the same view as long as EUR holds above 1.1640 (‘strong support’ level was at 1.1630 yesterday)."