FX Strategists at UOB Group now believe EUR/USD could be headed towards the 1.1640 level in the near term.

24-hour view: “The strong surge in EUR to a high of 1.1597 came as a surprise (we were expecting sideway-trading). Further gains are not ruled out but the major resistance at 1.1640 is unlikely to come into the picture (1.1620 is already quite a strong level). Support is at 1.1575 followed by 1.1560.”

Next 1-3 weeks: “Yesterday, EUR soared and took out our ‘strong resistance’ level at 1.1585 before closing higher by +0.56% (NY close of 1.1592), its biggest 1-day gain in 5 months. The break of the ‘strong resistance’ indicates that the weak phase that started 2 weeks ago (see annotations in the chart below) has ended. The rapid rise has gathered momentum quickly and EUR is likely trade with an upward bias towards 1.1640. Further advance is not ruled out but 1.1640 may not be easy to crack. The upward bias is deemed intact as long as EUR does not move below 1.1540 within these few days.”

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