EUR/USD: A sustained advance to 1.1350 is unlikely - UOB Group

EUR could rise above 1.1290; the current momentum suggests any further advance is unlikely to reach 1.1320. In the longer run, increase in momentum is not sufficient to suggest a sustained advance; EUR must first break decisively above 1.1290, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.1200, the upside potential to dissipate

24-HOUR VIEW: "EUR rose to 1.1288 on Monday and then pulled back. Yesterday, Tuesday, we stated that 'there is a chance for a retest of the 1.1290 level before a more sustained pullback is likely', but we were of the view that 'a clear break above 1.1290 appears unlikely.' We pointed out that 'should EUR break below 1.1195 (minor support is at 1.1215), it would suggest that it is more likely to trade in a range instead of retesting 1.1290.' EUR then dipped to 1.1216, rebounding to reach a high of 1.1285 in the late NY session before closing at 1.1282 (+0.36%). Due to the slight increase in upward momentum, EUR could rise above 1.1290 today. Further advance is not ruled out, but based on the current momentum, EUR is unlikely to reach 1.1320. Support levels have moved higher to 1.1260 and 1.1235."

1-3 WEEKS VIEW: "Following EUR's rise to 1.1288 two days ago, we indicated in our update yesterday (20 May, spot at 1.1235) that 'The increase in momentum is not sufficient to suggest a sustained advance.' We pointed out that EUR 'must first break decisively above 1.1290 before a

move to 1.1330 can be expected.' EUR then rose to 1.1285 and closed at 1.1282. While upward momentum has improved further, we prefer to see a daily close above 1.1290 before anticipating a sustained advance to 1.1350. On the downside, should EUR break below 1.1200 ('strong support' level was at 1.1165 yesterday), it would indicate that the upside potential has dissipated."