EUR/USD: Downside risk within defined range – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann see EUR/USD biased lower in the near term after breaking below 1.1720, but doubts a move to major support at 1.1665 today. For the coming weeks, they expect range trading between 1.1665 and 1.1795. Longer term, they still see scope for further Euro upside, though 1.1800 remains a key barrier.

Short term pressure but still rangebound

"24-HOUR VIEW: Two days ago, EUR dropped to a low of 1.1718 before recovering. When EUR was at 1.1745 in the early Asian session yesterday, we indicated that “there has been a tentative increase in downward momentum, and EUR could retest the 1.1720 level.” We also highlighted that “a break below this level is not ruled out, but we do not expect the major support at 1.1665 to come into view.” EUR subsequently broke below 1.1720 and dropped to a low of 1.1702. While the risk for today remains on the downside, the increase in downward momentum is not enough to indicate a move to 1.1665. Note that there is another support level at 1.1685. Resistance is at 1.1730; a breach of 1.1745 would indicate that the decline in EUR is stabilising."

"1-3 WEEKS VIEW: We highlighted on Monday (20 Apr, spot at 1.1750) that EUR “is likely to trade in a range for the time being, probably between 1.1665 and 1.1840.” Although there has been an increase in short-term downward momentum, it is not sufficient to indicate a continued decline. We continue to expect EUR to trade in a range, but a narrower 1.1665/1.1795 range is likely enough contain the price movements for now."

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