United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that EUR/USD slid to 1.1377 and closed at 1.1381, a two‑week low, as the Dollar strengthened ahead of United States (US) Consumer Price Index (CPI). While short‑term momentum has turned lower, they see limited scope for sustained losses, with 1.1360 and 1.1325 as key supports and range‑trading between 1.1360 and 1.1450 still the base case.

Euro pressured within defined range

"24-HOUR VIEW: EUR opened with a slight gap down yesterday. When it was at 1.1395, we indicated that “while the increasing downward momentum suggests EUR could decline further, the major support at 1.1360 could be out of reach.” We noted that “there is another support level at 1.1375.” We added, “to sustain the downward momentum, EUR must hold below 1.1420.” The subsequent price movements did not unfold as expected. EUR popped to a high of 1.1445 before plummeting to a low of 1.1377. EUR closed on a soft note at 1.1381 (- 0.28%). While the bias remains on the downside today, downward momentum is not particularly strong after the rise to 1.1445. Overall, as long as EUR holds below 1.1415 (minor resistance is at 1.1400), there is a chance for EUR to drop below 1.1360. That said, a continued drop below this level appears unlikely. The major support at 1.1325 is also unlikely to come into view."

"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (09 Jul, spot at 1.1420), when we highlighted that EUR “has likely moved back into a range-trading phase, expected to be between 1.1360 and 1.1450.” Yesterday, EUR fell to a low of 1.1377. The slight increase in downward momentum is insufficient to indicate a sustained decline. EUR must close below 1.1360 before a move to 1.1325 can be expected. The likelihood of EUR closing below 1.1360 will remain intact as long as EUR holds below 1.1445."

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