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FX Strategists at UOB Group noted the pair’s stance remains on the neutral side, adding that a strong resistance lies at 111.50.

Key Quotes

24-hour view: “We expected a higher USD yesterday but held the view that “the major 111.50 resistance is likely out of reach”. USD subsequently hit a high of 111.35 before staging a surprisingly sharp and rapid drop. USD has likely made a short-term top at 111.35 and the current movement is viewed as part of a correction phase. While the immediate bias is on the downside, any USD weakness is viewed as part of a 110.50/111.20 consolidation range”.

Next 1-3 weeks: “We have held the same view since last Monday (02 Jul, spot at 110.75) wherein “USD is to stay supported but any strength is unlikely to be sustained”. After trading mostly sideways since then, USD perked up in overnight trading and is currently approaching last week’s peak at 111.13. A move above 111.13 seems likely but the next level at 111.50 is a major level and is expected to offer solid resistance. To put it another way, the prospect for a clear break above 111.50 does not appear to be high at this stage. On the downside, only a break of the ‘key support’ at 110.30 (level previously at 110.10) would indicate that the current upward pressure has eased”.