The research team at UOB Group believes the pair’s downside could run out of steam in the next 1-3 weeks. Key Quotes “When we turned bearish two days ago (see FX Insights on 06 April when spot was at 110.40), we were of the opinion that we may have seen a bulk of USD weakness in view of the rapid and extended sharp drop”. “However, USD continues with its relentless down-move and touched an overnight low of 107.67. The next significant support is at the middle of the weekly trading envelope which is at 106.50”. “Interestingly, this level coincides with the 38.2% retracement of the rally from 75.31 (Oct 2011) to 125.85 (Jun 2015). While this is the obvious level to aim for, short-term momentum are showing early signs of slowing and this coupled with extreme oversold condition suggests that the odds for move to 106.50 are not very high”. “All that said, the outlook for USD is deemed as bearish unless there is a move above the prevailing stop-loss at 110.10 (109.00 is already a strong short-term resistance)”. For more information, read our latest forex news.