In opinion of FX Strategists at UOB Group, further upside momentum in spot could be losing traction.
Key Quotes
24-hour view: “The anticipated weakness in USD exceeded our expectation as it dropped below the strong 113.40 support indicated yesterday (low of 113.28 during late NY hours). The robust improvement in downward momentum suggests further USD weakness is likely. From here, barring a move above 114.05 (minor resistance at 113.85), USD could weaken further toward the next support at 113.10″.
Next 1-3 weeks: “We indicated yesterday (14 Nov, spot at 113.80) “upward momentum has deteriorated and a prolonged consolidation around current level would quickly increase the risk of a short-term top”. Instead of consolidating, USD dipped to a low of 113.28, not far from the 113.20 ‘key support’. The odds for USD to test last month’s 114.54 peak have clearly diminished and unless there is a NY closing above 114.05, a break of 113.20 would not be surprising. Looking ahead, a breach of 113.20 would not change the current neutral outlook but suggest USD has moved back into a sideway-trading phase”.
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