In view of FX Strategists at UOB Group, the pair’s stance remains constructive and could visit the 111.00 handle in the next weeks.
24-hour view: “We expected a higher USD yesterday but were of the view that “110.80 may not be an easy level to break”. Post-FOMC, USD moved above 110.80 but plummeted after briefly touching a high of 110.84. Upward pressure has eased with the sharp drop from the high and from here, USD is likely to consolidate and trade sideways at these higher levels. Expected range for today; 109.95/110.65”.
Next 1-3 weeks: “USD edged above the 110.50 resistance at the time of writing (high of 110.54) and as highlighted yesterday, a clear break of this level would indicate that the current USD strength could test the 111.00 resistance. Further extension to last month’s top near 111.40 is not ruled out but the odds for such a move are not high (momentum indicators appear to be lackluster at this stage). Overall, we hold a ‘positive’ view for USD (especially for the next few days) and only a break of the ‘key support’ at 109.70 (level previously at 109.40) would indicate that the current upward pressure has eased”.
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