FX Strategists at UOB Group remain neutral on the pair while they expect it to extend the sideline pattern in the next weeks.
Key Quotes
24-hour view: “While we expected “111.50 to offer solid resistance” yesterday, the subsequent rapid and sharp decline from a high of 111.42 came as a surprise. The sudden down-swing has scope to extend lower but the 110.10 seen earlier this week is acting as a strong support now and the prospect for a clear break of this level is not high (next support is at 109.85). Resistance is at 110.85 followed by 111.10. The 111.42 high is not expected to come into the picture for today”.
Next 1-3 weeks: “The price action in USD continues to confound us as it surrendered most of the gains made over the past two days. Note that USD rebounded strongly from a low of 110.10 Monday (13 Aug) and hit a high of 111.42 yesterday (15 Aug) before dropping sharply and closed at 110.73 in NY (-0.36%). As highlighted yesterday, the outlook is unclear and it appears that USD is trading in a broad range now. After yesterday’s price action, the expected range is likely lower between 109.85 and 111.50 (instead of 110.30/112.20 as expected previously)”.
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