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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”.