The pair’s outlook remains neutral, while a test of the mid-110.00s still appears on the cards, suggested FX Strategists at UOB Group.
24-hour view: “Expectation for USD to trade sideways was incorrect as it rose to a high of 109.66. The strong daily closing (closed at 109.65 in NY) suggests further upward pressure even though last week’s top near 110.00 is acting as a very solid resistance and this level is unlikely to yield so easily. On the downside, only a move back below 109.20 would indicate that the immediate upward pressure has eased (minor support is at 109.40)”.
Next 1-3 weeks: “We have held the same view since last Thursday (10 May, spot at 110.75) wherein the immediate upward pressure could lead to a test of the major 110.45/50 resistance. Since then, the advance in USD been capped by the 110.00 level but in view of the still positive outlook, we continue to expect a move to 110.45/50. At this stage, a sustained move above this level is not expected. Only a move back below 109.00 would indicate that the current mild upward pressure has eased”.