FX Strategists at UOB Group stay bearish on the pair, expecting a potential test of the 108.10 region in the near term.
“The call to wait for a NY closing below the rising trend-line at 109.50 before turning bearish yesterday was untimely as USD plunged below this level and extended its loss after NY close (low of 109.00 at the time of writing)”.
“The sudden acceleration lower is unexpected and is already approaching the June’s low of 108.80. In other words, the USD weakness is already close to its immediate target”.
“While the sharp decline appears to be running ahead of itself, a break below 108.80 would open up the way for further extension to the year-to-date low near 108.10”.
“On the upside, resistance is at 109.80 but only a move back above 110.10 would indicate that our bearish view is wrong. In view of the close proximity of the major support at 108.80, those looking to sell may want wait for bounce to 109.50 and 109.80 (average sell) with a stop-loss at 110.10”.
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