FX Strategists at UOB Group stay neutral on the pair, which should remain under pressure while below the mid-113.00s.
“Expectation for a stronger recovery was clearly wrong as USD plummeted to a low of 112.24 last Friday. With no signs of stabilization just yet, another push lower to test the major 112.00 support seems likely (next support at 111.70). This is a rather strong level and a clear break is not expected. Resistance is at 112.85 but stabilization is only upon a move back above 113.05”.
“USD registered a low of 114.24 last Friday, holding above the bottom of our expected 112.00/114.20 sideway trading range. The rapid pace of decline has resulted in a swift pick-up in downward momentum and from here, USD is expected to stay under pressure unless it can reclaim 113.55 in the next few days. That said, 112.00 is a strong support and may not yield so easily and this level is followed closely by another strong support at 111.70”.
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