Key Moments
- UOB Group analysts see EUR/USD inclined to drift lower, but not likely to test the key 1.1650 support in the near term.
- Short-term support levels are highlighted at 1.1680 and 1.1650, with resistance noted at 1.1715 and 1.1730.
- The downside bias over the next 1-3 weeks remains intact as long as EUR/USD stays below the 1.1755 strong resistance level.
Short-Term Outlook: Euro Seen Gradually Weakening
EUR is described as likely to “edge lower,” with UOB Group’s FX analysts Quek Ser Leang and Peter Chia emphasizing that any pullback is not expected to reach the major support at 1.1650 in the immediate term. They note that, in the broader context, the directional bias still leans to the downside, but a daily close below 1.1680 would be required before a move toward 1.1650 can be anticipated.
Intraday Price Action and Levels
In their 24-hour view, the analysts recall that after Monday’s price behavior, they had stated that EUR “appears to have entered a range-trading phase, and it is likely to trade between 1.1695 and 1.1750”. The pair then climbed to 1.1742, retreated to 1.1683, and ended the session weaker at 1.1687 (-0.28%).
They observe that the modest pickup in bearish momentum suggests EUR is likely to slip further within the current session. However, they stress that a move down to the major 1.1650 support is not anticipated. A nearer support is identified at 1.1680, while resistance is seen at 1.1715 and 1.1730 on the upside.
| EUR/USD Level | Role | Comment |
|---|---|---|
| 1.1742 | Recent intraday high | Reached before retreating lower |
| 1.1715 | Resistance | Near-term upside cap in current view |
| 1.1730 | Resistance | Higher near-term resistance level |
| 1.1687 | Recent close | Closed on a soft note, down -0.28% |
| 1.1683 | Intraday low | Registered before the soft close |
| 1.1680 | Support | Key level that must be closed below to open path to 1.1650 |
| 1.1658 | Recent low | Level touched before a strong rebound |
| 1.1650 | Major support | Downside target only if 1.1680 breaks on a closing basis |
| 1.1755 | Strong resistance | Level that would negate current downside bias if breached |
1-3 Week Perspective: Downside Bias Conditional on Key Levels
In their 1-3 week outlook, the analysts refer back to their comments from two days earlier (05 Jan, spot at 1.1715), when they stated that “the bias is tilted to the downside toward 1.1680”. After EUR slid to 1.1658 and then rebounded strongly, they reiterated yesterday (06 Jan, spot at 1.1715) that “while the bias remains tilted to the downside, EUR must close below 1.1680 before a move toward 1.1650 can be expected”.
They confirm that this stance remains unchanged. The downside bias will stay in place as long as the pair does not break above 1.1755, which they now identify as the “strong resistance” level, revised from 1.1765 a day earlier.
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