FX Strategists at UOB Group noted the pair remains neutral although a tough resistance awaits in the mid-111.00s.
Key Quotes
24-hour view: “Expectation for USD to trade sideways was wrong as it rose to touch a high of 110.90. The subsequent strong daily closing in NY suggests USD is to stay supported. From here, a move above last week’s 111.13 peak would not be surprising but the next resistance at 111.50 is a major level and is likely out of reach for now. On the downside, only a move back below 110.60 would indicate that the current upward pressure has eased”.
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”.
Share
