EUR/USD: Likely to edge above 1.1795 - UOB Group

While negative divergence is forming, Euro (EUR) could edge above 1.1795 against US Dollar (USD); the major resistance at 1.1830 is likely out of reach for now. In the longer run, price action indicates further EUR strength, likely toward 1.1795, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action indicates further EUR strength

24-HOUR VIEW: "EUR rose sharply and reached a high of 1.1760 two days ago before easing. In the early Asian session yesterday, when EUR was at 1.1740, we held the view that 'while there is potential for EUR to rise above 1.1765 today, overbought conditions suggest it might not be

able to hold above this level.' We added, 'the next resistance at 1.1795 is unlikely to come under threat.' We also pointed out that 'to sustain the overbought momentum, EUR must hold above 1.1700, with minor support at 1.1720.' After dipping to a low of 1.1709 in the early NY session, EUR rose to a high of 1.1775 before closing at 1.1770, up by 0.14%. While negative divergence is starting to form, EUR could edge above the 1.1795 level before a pullback can be expected. Given the negative divergence, the major resistance at 1.1830 is likely out of reach for now. On the downside, the two support levels to watch are 1.1755 and 1.1735."

1-3 WEEKS VIEW: "Our update from yesterday (23 Jul, spot at 1.1740) still stands. As highlighted, the recent price action 'indicates further EUR strength, likely toward 1.1795.' Looking ahead, a clear break above 1.1795 will shift the focus to 1.1830. Overall, only a breach of 1.1690 ('strong support' level was at 1.1655 yesterday) would indicate that EUR is not strengthening further."