FX Strategists at UOB Group remain neutral on the pair while a test of the 111.40 region is still on the cards.
24-hour view: “Against our expectation, USD did not break the strong 110.50 resistance yesterday (high of 110.49). However, this level was taken out after NY close (at the time of writing, high has been 110.54) and we continue to see upside risk from here. That said, upward momentum is patchy at best and 110.80 may not be an easy level to break (next resistance is at 111.00). Only a break back below 109.95 would indicate that the immediate upward pressure has eased (minor support is at 110.15)”.
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”.