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UOB Group’s Quek Ser Leang highlights that EUR/USD has staged a sharp rebound after drifting sideways, following a decline from January’s high to mid-June’s low. The pair is seen with scope to extend gains, but the analyst stresses that the 1.1560/1.1565 zone, aligned with the daily Ichimoku cloud top and a weekly trendline, is critical resistance, while support is noted at 1.1470 and 1.1445.
Rebound constrained by cloud resistance
“EUR/USD rose briefly to 1.2078 in late January before declining to 1.1324 in mid-June. It then drifted sideways until last week, when it rebounded sharply. Given the deeply oversold weekly slow stochastic, the rebound was not surprising.”
“While there is scope for EUR/USD to rebound further, it must first surpass the significant resistance at 1.1560/1.1565.”
“The upper boundary of the daily Ichimoku cloud at 1.1560 was tested a few times this week but remained intact. The declining weekly trendline from January’s high is currently near 1.1565. Looking ahead, should EUR/USD break and hold above 1.1560/1.1565, it could rise toward 1.1622, the minor peak in June.”
“Support is at 1.1470 (current level of the 21-day EMA), followed by the lower boundary of the daily Ichimoku cloud at 1.1445. If EUR/USD breaks below 1.1445, it would mean that the top of the cloud may continue to act as significant resistance for some time.”
