FX Strategists at UOB Group noted EUR/USD faces extra gains above the 1.2180 level in the near-term.
24-hour view: “We expected EUR to ‘advance further’ yesterday, but we were of the view that ‘1.2180 is unlikely to come into the picture’. Our expectation was not wrong as EUR rose to 1.2168 before easing off. While upward momentum remains patchy, there is room for EUR to test 1.2180 first before a more sizeable pullback can be expected. For today, the next resistance at 1.2200 is unlikely to come under threat. On the downside, a breach of 1.2115 (minor support is at 1.2130) would indicate that the current upward pressure has eased.”
Next 1-3 week: “Our update from yesterday (17 May, spot at 1.2140) still stands. As highlighted, upward momentum is lackluster and EUR has to close above the major resistance at 1.2180 before a sustained advance can be expected. The prospect for EUR to close above 1.2180 is not high for now but it would remain intact as long as it does not move below 1.2065 within these several days. Looking ahead, the next resistance levels above 1.2180 are at 1.2200 and 1.2240.”