In view of FX Strategists at UOB Group, the pair could be getting ready for a stronger rebound in the near term.
24-hour view: “The ‘target’ highlighted at 112.20 yesterday was exceeded as USD dropped to a low of 111.98. While it is too early to expect a sustained rebound, the current price action looks like the early stages of a basing process. From here, allow for a retest of 111.95/00 but 111.70 is expected to hold for a move higher to 112.60”.
Next 1-3 weeks: “As highlighted in recent updates, the current positive undertone in USD is deemed as intact as long as the key short-term support at 111.30 is not taken out. However, USD has to surmount the strong 113.15 resistance before a more sustained up-move can be expected. The prospect for such a scenario is not high at this stage but is expected to improve as long as 111.30 is not taken out”.
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