FX Strategists at UOB Group remain neutral on spot and could grind lower to the 111.20 area.
Key Quotes
24-hour view: “In line with expectation, USD registered an ‘inside day’ as it traded within Tuesday’s range. However, it closed on a weak note (NY close of 112.25) and moved below the overnight low of 112.08 after NY close. Downward pressure has picked up and the major 111.80 support appears to be vulnerable. A break of the major support could lead to a quick drop to 111.50. Resistance is at 112.40 followed by 112.60″.
Next 1-3 weeks: “We held the same view since last Thursday (18 Oct, spot at 112.65) wherein “USD has moved into a consolidation phase” and is expected to trade sideways within a 111.80/113.30 range. The price action since then is line with our expectation as USD traded sideways between 111.93 and 112.88 for the past several days. That said, the soft daily closing in NY (112.25, -0.16%) has weakened the underlying tone and from here, the risk of a clear break of 111.80 has increased. A break of this level would suggest USD could weaken further to the next support at 111.20. All in, USD is expected to stay under pressure unless it can break above the ‘key resistance’ at 112.80″.
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