Euro: Downward bias capped by 1.1390 support against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang sees EUR/USD retaining a mild downside bias after slipping below a prior strong support at 1.1405. Intraday losses are expected to be limited to tests of 1.1390, with resistance at 1.1430–1.1445. Over the coming weeks, the pair is now viewed as range-trading between 1.1360 and 1.1465, with 1.1210 the next target if key supports fail.

Euro-Dollar shifts back into range trading

"24-HOUR VIEW: While we indicated yesterday that EUR “could edge lower,” we held the view that “any decline is likely to be contained within a 1.1405/1.1450 range.” EUR subsequently rose to 1.1449, dipped to a low of 1.1402 before settling at 1.1414 (-0.22%). The price action has resulted in a slight increase in downward momentum, and we continue to expect EUR to edge lower today. This time around, any decline is likely limited to a test of 1.1390. Resistance is at 1.1430; a breach of 1.1445 would suggest that the current mild downward pressure has eased."

"1-3 WEEKS VIEW: Last Thursday (16 Jul, spot at 1.1470), we highlighted that while EUR “is likely to trade with an upside bias, it is too early to determine whether there is sufficient momentum for EUR to reach the significant resistance level at 1.1520.” Yesterday, EUR dipped below our ‘strong support’ level at 1.1405 with a low of 1.1402. The breach of our ‘strong support’ level indicates that upward momentum has faded. The current price movements are likely part of a range-trading phase, which is expected to be between 1.1360 and 1.1465."

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