Euro: Rebound tests key resistance band against US Dollar – UOB

The Euro rebounded to around 1.1200 against the US Dollar, following a period of oversold weakness, according to United Overseas Bank's analysts Quek Ser Leang and Lee Sue Ann. In the short term, they believe the Euro may challenge the resistance level of 1.1220, while a sustained break above this point would indicate that the month-long downtrend has stabilized.

However, they still note that the currency pair remains deeply oversold, and further downside cannot be entirely ruled out. Earlier in the week, the Euro fell sharply to a low of 1.1151. This initial decline was later corrected, with the Euro reaching a high of 1.1204. The analysts expect the rebound to gain momentum, potentially breaking above the strong resistance level of 1.1220.

Currently, support is seen at 1.1185 and 1.1170. Over the next one to three weeks, the analysts forecast that the Euro's decline may gradually stabilize around 1.1115. This expectation stems from the fading weakness in the Euro, which began more than a month ago. The analysts believe that a break above the strong resistance level of 1.1220 would signal that the decline that started over a month ago has stabilized.