According to FX Strategists at UOB Group, further upside in the pair is not ruled out in the short-term horizon.
Key Quotes
24-hour view: “We highlighted last Friday that USD “could move above the August’s peak of 112.14″ but the next resistance at 112.60 could “be just out of reach”. While USD moved above the 112.14, it only managed to touch a high of 112.16 before easing off. Upward momentum has waned and from here, USD is deemed to have moved into a consolidation phase. In other words, USD is expected to trade sideways, likely between 111.70 and 112.20″.
Next 1-3 weeks: “We have held the same view since last Wednesday (12 Sep, spot at 111.60) wherein “the probability for a test of last month’s 112.15 peak has increased”. We added last Friday (14 Sep, spot at 111.95) that “a move above 112.15 would not be surprising but at this stage, it is unclear if any up-move can be sustained”. USD subsequently touched a high of 112.16 during NY hours on Friday and while the USD up-move clearly lacks vigor, further strength cannot be ruled out. That said, we still have doubts on whether any further advance can be sustained. All in, the current low prospect for further strength to 112.60 would continue to improve as long as the ‘key support’ at 111.35 remains intact”.
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