The Euro (EUR) declined against the US Dollar (USD), reaching a two-week low of 1.1377 and closing at 1.1381, as the Dollar strengthened ahead of the United States Consumer Price Index (CPI) release [1]. According to United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann, the short-term momentum for the Euro has turned lower, but there is limited scope for sustained losses at this stage [1]. Key support levels are identified at 1.1360 and 1.1325, with the base case scenario being range-trading between 1.1360 and 1.1450 [1].
During the trading session, the Euro opened with a slight gap down and briefly rose to a high of 1.1445 before dropping to the session low. The currency closed on a soft note, down 0.28% for the day [1]. While the bias remains to the downside, analysts note that the downward momentum is not particularly strong following the earlier rise to 1.1445 [1]. As long as the Euro remains below 1.1415, there is a chance for it to test the 1.1360 support, though a sustained drop below this level is considered unlikely at present [1].
Looking ahead, UOB maintains that the Euro is likely to remain in a range-trading phase between 1.1360 and 1.1450. A close below 1.1360 would be required before a move toward the next major support at 1.1325 can be expected. The likelihood of a close below 1.1360 persists as long as the Euro stays below 1.1445 [1].
CONCLUSION
The Euro has shown a downside bias against the US Dollar, but key support levels have held, limiting the scope for further losses. Analysts expect range-bound trading to continue unless the Euro closes below 1.1360, which could open the door to additional declines.