Euro: Downtrend takes aim at 1.1095 support against US Dollar – UOB

Downside pressure on EUR/USD has strengthened, according to UOB’s Quek Ser Leang and Lee Sue Ann, after a quicker-than-expected break below 1.1135 took the pair to 1.1121. For the intraday outlook, they consider bearish momentum strong but stretched, which could prevent a decisive break below 1.1095. Support stands at 1.1110, while resistance lies at 1.1145/1.1160. Their 1–3 week outlook continues to favour a move towards 1.1095, with strong resistance now placed at 1.1190.

Can the euro extend losses despite oversold conditions near lows?

"24-HOUR VIEW: EUR declined to a low of 1.1172 two days ago. Yesterday, when EUR was at 1.1175, we stated that “given the increasing downward momentum, the bias for EUR is tilted to the downside toward 1.1150.” We pointed out that “the next support at 1.1135 is likely out of reach for now.” Our directional call was correct, 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. Resistance is at 1.1145, followed by 1.1160."

"1-3 WEEKS VIEW: We turned negative on EUR yesterday (27 Oct, spot at 1.1175), indicating that “there has been a tentative buildup in downward momentum, and from here, EUR could edge lower, potentially testing 1.1135.” We added, “to sustain the downward momentum, EUR must hold below the ‘strong resistance’ level, now at 1.1220.” We did not expect EUR to breach 1.1135 so quickly, as it dropped to a low of 1.1121. While short-term conditions are oversold, EUR could continue to decline toward 1.1095. On the upside, the ‘strong resistance’ level is now at 1.1190."

(An editor reviewed this article, which was produced with assistance from an Artificial Intelligence tool. Learn more.)