Euro (EUR) could break below 1.1630, but it is unlikely to reach the next support at 1.1595. In the longer run, tentative increase in downward momentum could lead to EUR edging lower and testing 1.1595, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Tentative increase in downward momentum

24-HOUR VIEW: "Two days ago, EUR dropped to a low of 1.1655. Yesterday, when it was at 1.1665, we indicated that 'given the tentative increase in downward momentum, EUR is likely to trade with a downward bias today.' However, we stated that 'any decline is unlikely to threaten the major support at 1.1630. On the upside, resistance levels are at 1.1685 and 1.1700.' We were not wrong, as EUR dropped briefly to 1.1637, rebounded to 1.1692, and then pulled back down to close at 1.1646 (-0.12%). We continue to detect a tentative increase in downward momentum, but this time around, it could lead to EUR breaking below 1.1630. That said, based on the current momentum, EUR is unlikely to reach the next support at 1.1595. Today’s resistance levels are at 1.1665 and 1.1685."

1-3 WEEKS VIEW: "In our most recent update from Monday (18 Aug, spot at 1.1705), we highlighted that the outlook is mixed for EUR, and 'for the time being, it is likely to trade in a range of 1.1630/1.1755.' Yesterday, EUR edged to a low of 1.1637, and there has been a tentative increase in downward momentum. From here, as long as EUR holds below the ‘strong resistance’ level, currently at 1.1705, it could edge lower and test the major support at 1.1595. It is too early to determine whether EUR can break clearly below this level."