In view of FX Strategists at UOB Group, the rebound in spot is seen as corrective only and it is unlikely to test the 1.1250 area.
24-hour view: “We highlighted yesterday the “decline in EUR could extend lower but any weakness is viewed as a lower trading range of 1.1080/1.1140”. While EUR drifted close to the bottom of the expected range and touched 1.1084, the 24-hour range of 1.1084/1.1115 was narrower than anticipated. The underlying tone still appears to be on the soft side and EUR could continue to drift lower from here. That said, a break of the solid 1.1050 support would come as a surprise (there is another support at 1.1070). On the upside, only a move above 1.1120 would indicate that the current mild downward pressure has eased”.
Next 1-3 weeks: “There is not much to add to the update from yesterday (26 Aug, spot at 1.1145). As highlighted, the current movement in EUR is viewed as a corrective rebound that has room to extend higher. However, the month-to-date high near 1.1250 is a solid resistance and this level could be out of reach. After yesterday’s rapid retreat, 1.1180 is already quite a strong level ahead of 1.1220 and 1.1250. On the downside, a break of 1.1050 would indicate that the current upward pressure has eased”.