UOB Sees Further Euro Downside Despite Recent Rebound

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann reported that the Euro briefly dipped below 1.1180 against the US Dollar, reaching a 17-month low before recovering to close around 1.1220. In their intraday outlook, they anticipate the currency pair will consolidate within a defined range.

Looking ahead to the next 1-3 weeks, UOB maintains a bearish stance on the Euro, cautioning that despite a slowing momentum, the pair could test 1.1145 or even hit the 1.1215 technical target on a 1-3 month view.

The strategists noted that their earlier prediction of range-trading was incorrect. Instead, EUR/USD dropped to a low of 1.1160 during the Asian session before rebounding, closing 0.28% lower at 1.1221. They attribute this movement to a lack of clear downward momentum.

UOB has held a negative outlook on the Euro since mid-September. They highlighted that while the Euro could continue to decline, the sustainability of the rapid pace remains uncertain. The key support level to watch is 1.1180, which was breached yesterday, reaching a low of 1.1160 before rebounding. The strategists believe a breach of 1.1285 would indicate stabilization of the decline.