EUR/USD has 1.2500 in the crosshairs – UOB

The pair could now attempt a visit to the 1.2500 handle, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected a higher EUR yesterday, the ease of which it took out the strong resistance levels at 1.2365 and 1.2400 came as a surprise (overnight high of 1.2420). The rapid rise appears to be running ahead of itself but further upward extension towards 1.2465 would not be surprising. At this stage, the odds for a break above the next resistance at 1.2500 are not high. Support is at 1.2385 but only a move back below 1.2350 would indicate that a short-term top is in place”.

Next 1-3 weeks: “When we turned neutral two days ago (05 Mar, spot at 1.2335), we viewed EUR’s strength as a ‘correction’ but were of the view that the immediate bias is for a ‘probe’ higher towards the top of the expected 1.2220/1.2430 consolidation range. EUR touched an overnight high of 1.2420 and ended the day on a solid note. The undertone has improved considerably and the current EUR strength has room to extend further towards 1.2500. This level is expected to offer solid resistance. At this stage, the odds for a move above last month’s 1.2555 peak are deemed as low. Overall, after the strong advance yesterday, we expect EUR to stay underpinned (at least for the next several days) and only a move back below the key support at 1.2300 would indicate that the immediate upward pressure has eased (minor support is at 1.2350)”.