The pair’s stance remains tilted to the neutral side, although a break of 109.20 is not expected so far.
Key Quotes
24-hour view: “Expectation for USD to “grind higher to 110.50″ yesterday was wrong as it dropped sharply from a high of 110.21. The decline appears to be running ahead of itself even though a dip below the overnight low of 109.47 is not ruled out. That said, we do not expect a clear break below the next support at 109.20. On the upside, we expect 110.20 to be strong enough to cap any intraday rebound (minor resistance is at 110.10)”.
Next 1-3 weeks: “USD failed to maintain a foothold above 110.00 as it dropped sharply from a high of 110.21. The outlook remains mixed and we continue to hold a neutral view. On a shorter-term basis, the bias is still for USD to probe the top of the expected 108.50/110.50 consolidation range. In view of the mixed indications, we do not anticipate a clear break above 110.50″.
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