According to FX Strategists at UOB Group, further gains to the 111.00 area in the near term are not ruled out.
24-hour view: “The solid resistance indicated at 110.00 held for most of yesterday until the release of US retail sales data sent USD soaring to a high of 110.45. The subsequent strong daily closing in NY suggests further upward pressure even though overbought condition could ‘limit’ any gains to 110.75 (next resistance is at 111.00). On the downside, we expect 109.65 to be strong enough to hold any intraday pull-back (minor support is at 110.00)”.
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. After trading sideways for several days, USD finally managed to move higher and hit an overnight high of 110.45. At this stage, the prospect for a sustained move above 110.45/50 is not high but until there is break of the ‘key support’ at 109.65, we could not rule out further USD strength to 111.00”.
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