Euro: Downside risk hinges on 1.1110 against US Dollar – UOB

UOB strategists Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has shifted into a short-term range phase after rebounding to 1.1152. For the next 24 hours they see consolidation between 1.1120 and 1.1190. Over a 1–3 week horizon, a sustained decline requires a break and close below 1.1110, while a corrective recovery could eventually extend above the 21-day EMA at 1.1280.

Euro holds range with fragile momentum

"24-HOUR VIEW: After EUR fell more than we expected two days ago, we highlighted the following yesterday: “Our directional call was incorrect, but we underestimated the downward momentum, as EUR declined to a low of 1.1121. Downward momentum remains strong, but given the oversold conditions, EUR may not be able to break clearly below 1.1095 today. Note that there is another support level near 1.1110.” EUR subsequently dipped to a low of 1.1111 and recovered. During the NY session, EUR popped to a high of 1.1169 before settling at 1.1152 (+0.27%). EUR has likely moved into a range-trading phase. Today, we expect EUR to trade between 1.1120 and 1.1190."

"1-3 WEEKS VIEW: On Tuesday (27 Oct, spot at 1.1175), we indicated that EUR “could edge lower, potentially testing 1.1135.” After EUR dropped to a low of 1.1121, we highlighted yesterday (28 Oct, spot at 1.1130) that “while short-term conditions are oversold, EUR could continue to decline toward 1.1095.” EUR then declined to 1.1111 before rebounding. Downward momentum has slowed somewhat with the rebound, and EUR must break and close below 1.1110 before a sustained decline can be expected. The likelihood of EUR closing below 1.1110 will remain intact as long as 1.1190 (no change in ‘strong resistance’ level) is not breached."

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