The Euro (EUR) is likely to trade with a downward bias. Tentative buildup in momentum suggests downside risk; any further decline in EUR is unlikely to break clearly below 1.0815, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

EUR is unlikely to break clearly below 1.0815

24-HOUR VIEW: “We expected EUR to trade in a sideways range of 1.0875/1.0910 yesterday. Our view was incorrect, as EUR fell, reaching a low of 1.0842. EUR closed on a soft note at 1.0851 (-0.35%). Downward momentum is building, albeit tentatively. Today, the risk for EUR remains on the downside. Given the tentative buildup in momentum, any further decline is unlikely to break clearly below 1.0815. Resistance is at 1.0870; a breach of 1.0885 would mean that the momentum buildup has faded.”

1-3 WEEKS VIEW: “Two days ago (22 Jul, spot at 1.0895), we highlighted that ‘the recent EUR strength that started two weeks ago has come to an end.’ We added, ‘the current price action is likely part of a range trading phase,’ and we expected EUR to trade between 1.0845 and 1.0945. Yesterday, EUR fell slightly below the bottom of our expected range, reaching a low of 1.0842. Downward momentum is building, but not sufficiently enough to suggest a significant decline. From here, we expect EUR to trade with a downward bias, but the 1.0815 level is expected to provide solid support. The downward bias is intact as long as 1.0905 is not breached.”