Euro (EUR) appears to have entered a range-trading phase between 1.1695 and 1.1750. In the longer run, bias remains tilted to the downside, but EUR must close below 1.1680 before a move toward 1.1650 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.1680, a move toward 1.1650 can be expected

24-HOUR VIEW: "We expected EUR to 'edge lower' yesterday, but we indicated that 'any decline is unlikely to threaten the major support at 1.1680'. Although EUR fell more than expected to 1.1658, it rebounded strongly from the low to close marginally higher by 0.01% at 1.1720. EUR appears to have entered a range-trading phase, and it is likely to trade between 1.1695 and 1.1750 today."

1-3 WEEKS VIEW: "The following are excerpts from our update yesterday (05 Jan, spot at 1.1715). 'The bias from here is tilted to the downside toward 1.1680. Looking ahead, if EUR breaks and holds below this level, it could trigger a more sizeable pullback towards 1.1650. The current mild downward pressure would remain in place as long as the ‘strong resistance’ level, now at 1.1775, is not breached.” We did not expect EUR to reach 1.1680 so quickly, as it dropped to a low of 1.1658. However, EUR was unable to hold on to its decline as it rebounded strongly from the low. While the bias remains tilted to the downside, EUR must close below 1.1680 before a move toward 1.1650 can be expected. The likelihood of EUR closing below 1.1680 will remain intact as long as 1.1765 (‘strong resistance’ level was at 1.1775 yesterday) is not breached."