United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has rebounded from deeply oversold levels after dropping to 1.1324, with price action now viewed as consolidation in a slightly higher 1.1345–1.1395 band. They still hold a negative medium-term stance, saying Euro bears need a close below 1.1325 to target 1.1280, while a break of 1.1420 would invalidate the downside scenario.

Slide seen overstretched but downside risk lingers

"24-HOUR VIEW: EUR dropped to a low of 1.1324 on Wednesday and then rebounded. Yesterday, we pointed out that “the rebound from deeply oversold conditions suggests that instead of continuing to decline, EUR is more likely to consolidate today, probably between 1.1330 and 1.1385.” EUR then traded between 1.1333 and 1.1388, closing modestly higher by 0.11% at 1.1369. The price action still appears to be part of a consolidation phase, but the slightly firmer underlying tone suggests EUR is likely to trade within a higher range of 1.1345/1.1395 today."

"1-3 WEEKS VIEW: Tracking our negative EUR view from last week , we highlighted yesterday (25 Jun, spot at 1.1355) that “the steep decline appears to be overstretched.” We also highlighted that EUR “must close below 1.1325 before a move to 1.1280 can be expected.” We will continue to hold this view as long as 1.1420 (no change in ‘strong resistance’ level) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)