The euro’s weakness against the US dollar remains persistent, with major banks signaling that any recovery attempts are likely to be shallow and short-lived. According to United Overseas Bank (UOB), the downtrend is structurally intact, with key support at the 1.1600 level now in focus. Analysts at the bank note that the common currency has failed to mount a sustained rebound, and a decisive break below 1.1600 could accelerate losses toward the 1.1500 region. Resistance is seen clustered around 1.1750–1.1800, where selling pressure has repeatedly capped upside moves.
Danske Bank echoes a similarly cautious outlook, attributing the limited euro upside to a shift in Federal Reserve policy signals. The Fed’s hawkish communication—suggesting rates may stay higher for longer to combat inflation—has widened interest rate differentials in favor of the dollar. With US yields offering a premium over their European counterparts, demand for the greenback remains supported, especially as eurozone economic data, including sluggish German manufacturing, continue to disappoint. Danske Bank’s base case sees EUR/USD trading in a range with downside risks, and a sustained rally above 1.10 appears unlikely without clearer evidence of a Fed pivot or stronger eurozone growth.
Both institutions underscore the importance of monitoring US economic releases and Fed speeches for further direction. The overarching theme is one of persistent dollar strength driven by monetary policy divergence, leaving the euro on the defensive and reinforcing the bearish bias as long as the pair remains below its 200-day moving average.
