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According to FX Strategists at UOB Group, the pair could have charted a short-term low in the 110.60 area.

Key Quotes

24-hour view: “We highlighted yesterday there is “scope for USD to extend its gains to 112.10/15″ and added, “the next resistance at 112.50 is not expected to be challenged”. USD subsequently touched a high of 112.14 but the rapid and sharp pull-back from the high was not exactly expected. Upward pressure has clearly eased and we view the current movement as part of a consolidation phase. In other words, USD is expected to trade sideways from here, likely within a 111.30/112.05 range”.

Next 1-3 weeks: “Our recent expectation for USD to test the July’s low of 110.25 was wrong as it surged and took out the ‘key resistance’ at 111.80 (overnight high of 111.95). While the daily gain of +0.72% (NY close of 111.86) is relatively large, we are not convinced that USD has moved into a bullish phase. That said, USD has likely made a short-term low near 110.60 last week but any further strength from here is viewed as part of a 110.60/112.50 consolidation range and not the start of a sustained up-move”.