Euro (EUR) is likely to trade in a range between 1.1575 and 1.1635. In the longer run, EUR is under mild downward pressure; it may edge lower but is unlikely to threaten the support at 1.1540, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

EUR is under mild downward pressure

24-HOUR VIEW: "We expected EUR to 'trade between 1.1630 and 1.1670' yesterday. However, during the NY session, EUR edged to a high of 1.1665 before plunging to a low of 1.1577. The sharp drop appears to be overdone, and instead of continuing to weaken, EUR is more likely to trade in a range today, expected to be between 1.1575 and 1.1635."

1-3 WEEKS VIEW: "On Monday (27 Oct, spot at 1.1630), we indicated that EUR 'is likely to trade between 1.1585 and 1.1680.' After EUR rose to a high of 1.1668, we highlighted yesterday (29 Oct, spot at 1.1650) that 'the slight increase in upward momentum suggests EUR may rise above 1.1680.' We also highlighted that 'it is too early to determine if EUR can maintain a foothold above this level.' We added, 'the mild upward pressure will remain intact as long as EUR holds above 1.1605 (‘strong support’ level).' However, EUR dropped sharply, breaking below our ‘strong support’ level (low was 1.1577). This time around, there has been a slight increase in downward momentum. From here, EUR may edge lower, but given the mild momentum, any decline is unlikely to threaten the major support at 1.1540. Note that there is another support level at 1.1575. The mild downward pressure will remain intact as long as EUR holds below 1.1660 (‘strong resistance’ level)."