US Dollar (USD) could test 7.0860; a continued decline below this level is unlikely. The next support at 7.0700 is also unlikely to come under threat. In the longer run, the price action suggests USD could drop below 7.0860; the next level to watch is 7.0770, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
7.0700 is also unlikely to come under threat
24-HOUR VIEW: “When USD was at 7.1085 in the early Asian session yesterday, we were of the view that it ‘could dip below 7.1000 before a more sustained recovery can be expected.’ We were also of the view that ‘the year-to-date low of 7.0860 is likely out of reach for now.’ USD subsequently dropped to a low of 7.0916. The stronger than expected downward momentum suggests USD could test 7.0860 today. Given the oversold conditions, a continued drop below this level is unlikely. The next support at 7.0770 is also unlikely to come under threat. Resistance is at 7.1000; a break above 7.1055 would indicate that the weakness is stabilising.”
1-3 WEEKS VIEW: “The price action suggests USD could drop below 7.0860; the next level to watch is 7.0770. We have held a negative USD view since the middle of the month (as annotated in the chart below). Yesterday (28 Oct, spot at 7.1085), we highlighted that ‘the increasing downward momentum continues to indicate downside risk.’ However, we noted that ‘it is unclear for now if there is sufficient momentum for USD to break the year-to-date low of 7.0860.’ We did not quite expect USD to drop to a low of 7.0916. The price action suggests a break below 7.0860 would not be surprising. The next level to watch is 7.0770. Overall, only a breach of 7.1150 (‘strong resistance’ level was at 7.1280 yesterday) would indicate the current downward pressure has eased.”