UOB economists Quek Ser Leang Lee and Sue Ann report that EUR/USD spiked to 1.1848 before reversing sharply, ultimately closing at 1.1762 with a decline of 0.16% and opening with a gap lower the following day [1]. The analysts note that while there is scope for further weakness in the Euro, the recent sharp drop appears overextended, and any additional decline is expected to encounter firm support at 1.1715, with the major support at 1.1665 unlikely to be tested [1]. Resistance levels are identified at 1.1775 and 1.1800 [1].
Previously, UOB had anticipated EUR/USD would consolidate between 1.1760 and 1.1805, but the currency pair exceeded these expectations by soaring to 1.1848 before its reversal [1]. The economists now project that over the next one to three weeks, EUR/USD will likely trade within a range of 1.1665 to 1.1840, with 1.1850 considered out of reach for the time being [1].
Market implications suggest limited downside for the Euro, as the strong support at 1.1735 has not been breached and the price action indicates a period of range-bound trading rather than a further steep decline [1]. No forward-looking statements or analyst opinions regarding broader market reactions or impacts were provided beyond the expectation of range trading [1].
CONCLUSION
UOB economists expect EUR/USD to remain range-bound between 1.1665 and 1.1840 following a sharp reversal from recent highs. Downside appears limited, with firm support levels identified and resistance capped below 1.1850. The market takeaway is a shift from previous consolidation expectations to a more defined trading range for the Euro-Dollar pair.