FX Strategists at UOB Group remain neutral on spot and expect it extend the rangebound theme in the near term.
Key Quotes
24-hour view: “While we highlighted yesterday “a break of 113.05 seems highly unlikely”, the sharp and rapid drop from a high of 112.72 came as a surprise. The price action suggests that USD has likely made a short-term top and the current movement is viewed as part of a consolidation phase. In other words, USD is expected to trade sideways, likely within a 111.85/112.55 range”.
Next 1-3 weeks: “There is not much to add to yesterday’s (18 Oct, spot at 112.65) update. As highlighted, the 111.61 low registered on Monday (15 Oct) is likely a short-term bottom and USD has moved into a 111.80/113.30 consolidation range. Looking ahead, the risk of a break of the bottom of the range appears to be higher but even then, any decline has to contend with the rather strong support zone between 111.50 and 111.60″.
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