There is scope for Euro (EUR) to test the late-Sep low of 1.1645; it is unclear at this point if it can break clearly below this level, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

EUR is unlikely to break clearly below 1.1645

24-HOUR VIEW: "While we expected EUR to 'trade with a downward bias' yesterday, we pointed out that 'given the lackluster downward momentum, any decline is unlikely to threaten the major support at 1.1675.' Our view of a lower EUR was not wrong, but the subsequent price movements did not quite turn out as expected. EUR dropped to a low of 1.1649 before staging a strong and sharp rebound to close at 1.1709 (- 0.27%). The brief decline did not result in a significant increase in downward momentum. Today, instead of continuing to weaken, EUR is more likely to trade in a range of 1.1690/1.1730."

1-3 WEEKS VIEW: "Our most recent narrative was from last Thursday (02 Oct, spot at 1.1735) in which we stated that 'we are neutral on EUR now and expect it to trade between 1.1675 and 1.1790 for the time being.' Yesterday, EUR fell below 1.1675 and reached a low of 1.1649 before rebounding. The buildup in downward momentum is not sufficient to suggest a continued decline just yet. That said, there is scope for EUR to test the late-Sep low of 1.1645. At this point, it is unclear whether EUR can break clearly below this level. To maintain the buildup in downward momentum, EUR must hold below the ‘strong resistance’ level, now at 1.1755."