FX Strategists at UOB Group remains neutral on spot and noted it could slip back and test the mid-111.00s in the near term.
24-hour view: “We highlighted yesterday, “a break of 112.00 would not be surprising but the next support at 111.50 is likely out of reach (minor support is at 111.80)”. USD subsequently staged a brief dip and touched a low of 111.83 before recovering quickly. Despite the rebound, the underlying remains on the soft side and it is too early to expect a sustained recovery. USD is more likely to consolidate and trade sideways, likely between 111.80 and 112.50”.
Next 1-3 weeks: “When we shifted from a bullish to neutral stance on Tuesday (09 Oct, spot at 113.10), we held the view that USD has entered a correction phase. We expected USD to trade with a ‘negative bias’ within a 112.50/114.00 range and highlighted, “looking further ahead, there is risk of a deeper pull-back to 112.00 but the odds for such a move are not high for now”. The large drop of -0.59% yesterday came as a surprise as USD dropped to a low of 112.23 before extending its decline after NY close (low of 112.06 at the time of writing). The rapid improvement in downward momentum suggests USD would remain under pressure in the coming days. At this stage, we still view the USD weakness as a ‘correction’ and not the start of a major bearish reversal. That said, there is scope for USD to weaken further to 111.50 in the coming days. On the upside, only a break above the ‘key resistance’ at 113.00 would indicate that the current weak phase in USD has stabilized”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.