Euro: Recovery capped by resistance against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has bounced off recent lows near 1.1164 but downside momentum remains lacklustre. The Euro’s recovery is seen as constrained within 1.1190–1.1240 intraday, while the broader 1–3 week view still allows for a test of 1.1145 as long as strong resistance at 1.1265 holds and the oversold downtrend phase persists.

Euro rebound seen as limited in scope

"24-HOUR VIEW: EUR declined to a low of 1.1164 two days ago and then rebounded. Yesterday, when EUR was at 1.1200, we noted that “downward momentum has slowed with the rebound,” but we were of the view that EUR could “revisit 1.1165 before a more sustained recovery is likely.” However, dipped less than expected to 1.1171 before recovering to close 0.13% higher at 1.1209. The recovery could extend but with no clear increase in upward momentum, any advance is likely to stay within a 1.1190/1.1240 range."

"1-3 WEEKS VIEW: Two days ago (07 Oct, spot at 1.1255), we highlighted “downward momentum has slowed further.” We also highlighted that “only a clear break above 1.1285 (‘strong resistance’ level) would indicate that the weakness in EUR has stabilised.” After EUR fell to a low of 1.1164, we indicated yesterday (08 Oct, spot at 1.1200) that “downward momentum remains lackluster.” We added, “however, as long as the ‘strong resistance’ (level is now at 1.1265) continues to hold, there is a chance for EUR to test 1.1145.” We continue to hold the same view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)