EUR/USD: The European currency could reach 1.1635 in oversold territory before a more solid rebound

FX analysts from UOB Group Quek Ser Leang and Peter Chia evaluate that the euro (EUR) shows oversold technical conditions that could allow a move toward 1.1635 before a more solid recovery consolidates. In the medium term, the trend remains downward for the EUR, although the possibility of the 1.1615 level coming into play remains uncertain.

The technical outlook continues to show downward pressure

Short-term analysis (24 hours):

Two days ago, a depreciation of the EUR was expected, but it was noted that any decline would hardly reach the main support at 1.1650. The EUR fell to 1.1671, and subsequently analysts indicated that the bearish momentum maintained moderate strength, with expectations that the currency would continue to weaken. The support at 1.1650 could be tested, an assessment that proved correct.

The EUR ultimately dropped to 1.1642 before marginally recovering and closing at 1.1658 with a decline of -0.13%. Although selling pressure is pushing prices into oversold territory and the strength of the downward move is beginning to moderate, there is room for the EUR to touch the 1.1635 level before a more pronounced correction. The subsequent support at 1.1615 will likely remain out of immediate reach.

For the downward momentum to persist, the EUR must trade below 1.1690, with 1.1675 being a less significant resistance in this technical structure.

Medium-term outlook (1-3 weeks):

Analysts adopted a negative stance on the EUR since the beginning of the week. With the spot at 1.1675 on January 8, it was indicated that the price action suggested a possible move toward 1.1650, although it remained to be confirmed whether the currency could stay below this critical level.

After the EUR fell to 1.1642 and closed at 1.1658 with -0.13%, the technical scenario did not show a significant increase in the intensity of the downward move. However, the outlook for the EUR remains bearish. Uncertainty persists about whether the 1.1615 level will be reached in upcoming moves.

On the bullish side, a clear break above 1.1710 (considering that the previous strong resistance was at 1.1730) would indicate a break in the current downtrend and could open broader correction scenarios.