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In view of FX Strategists at UOB Group, the pair remains neutral although a visit to 109.35 in the near term is not ruled out.

Key Quotes

24-hour view: “We expected USD to weaken yesterday but were of the view that “any weakness is likely limited to a test of last week’s low near 110.10″. USD subsequently hit an overnight low of 110.01 before extending its loss after NY close to touch 109.93 at the time of writing. The immediate pressure is still on the downside even though the next major support at 109.35 is likely out of reach (109.60 is already a rather strong support). On the upside, we expect yesterday’s high near 110.65/70 to be strong enough to cap any intraday bounce (minor resistance is at 110.30)”.

Next 1-3 weeks: “USD closed on a relatively weak note yesterday (NY close of 110.06, -0.38%) and is currently approaching the bottom of our previously expected 109.85/111.50 consolidation phase. While downward momentum has picked up, it is too early to expect the start of a sustained decline. That said, we see scope for USD to test the 109.35 support and only a clear break of this level would indicate that USD is ready to challenge the May’s low of 108.10. All in, we hold a slightly ‘negative’ view on USD for now unless it can move and stay above the ‘key resistance’ at 110.70″.