Euro: Downside risk persists toward 1.1550 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has shifted into short-term range trading between 1.1570 and 1.1610 after a dip to 1.1565 and rebound to 1.1608. They still see scope for a test of 1.1550 unless 1.1630 strong resistance breaks. On a 1–3 month view, a prior decisive upside break keeps medium-term targets at 1.1800 and 1.1850 in focus.

Euro holds range with bearish bias

"24-HOUR VIEW: On Tuesday, EUR fell from 1.1624 to 1.1583, settling at 1.1592 (-0.21%). When EUR was at 1.1590 yesterday, we indicated that “while there is room for EUR to dip below Monday’s low of 1.1573, major support at 1.1550 is likely out of reach.” We noted that “resistance is at 1.1605, followed by 1.1620.” We were not wrong, as EUR dipped to a low of 1.1565. However, it subsequently rebounded strongly to 1.1608 before easing to close largely unchanged at 1.1587 (-0.04%). EUR has likely entered a range-trading phase and is expected to trade between 1.1570 and 1.1610 today."

"1-3 WEEKS VIEW: After EUR fell sharply last Friday, in our most recent narrative from Monday (31 Aug, spot at 1.1585), we highlighted that “the rapid increase in downward momentum suggests EUR could decline further.” We also highlighted that “the major support at 1.1550 may not come into view so soon.” Yesterday, EUR dipped to 1.1565 before rebounding. While there has been no further increase in downward momentum, there is still a chance for EUR to decline to 1.1550. Overall, only a breach of 1.1630 (‘strong resistance’ level previously at 1.1640) would indicate that EUR is not declining further."