Euro: Key support at 1.1135 in focus against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD rebounded but failed to sustain gains, reinforcing a short-term consolidation view. They see the Euro trading in a 1.1160–1.1220 band intraday, while on a 1–3 week horizon a break below 1.1135 would negate their positive bias. Over the 1–3 month horizon, they argue the September decline may have bottomed near 1.1112, allowing for a corrective recovery.

Euro holds but momentum mixed

"24-HOUR VIEW: EUR briefly rose to 1.1214 last Friday, pulled back sharply to a low of 1.1136 before recovering to close at 1.1158 (-0.18%). When it was at 1.1160 in the early Asian yesterday, we noted that “the immediate upward pressure has eased.” We also indicated that “the current price movements are likely part of a consolidation phase between 1.1135 and 1.1190.” Our assessments turned out to be incorrect. During the London session, EUR rose sharply, albeit briefly, to 1.1237 before retreating. EUR closed at 1.1185 (+0.24%). The brief advance did not lead to any increase in upward momentum. Today, we expect EUR to trade in a range between 1.1160 and 1.1220."

"1-3 WEEKS VIEW: Last Friday (30 Oct, spot at 1.1190), we indicated that EUR “could rebound further to 1.1220.” We highlighted that “a close above 1.1220 could lead to a move to 1.1250.” After EUR rose to 1.1214 and then dropped to a low of 1.1136, we highlighted yesterday (02 Nov, spot at 1.1160) that “the buildup in momentum has eased with the pullback, and a clear break below 1.1135 (‘strong support’ level) would indicate that the shift to a positive EUR view was premature.” Although EUR subsequently popped to a high of 1.1237, it was unable to hold on to its gains as it retreated to close at 1.1185 (+0.24%). With no clear change in momentum indicators, we continue to hold the same view as yesterday."

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