Strong momentum suggests US Dollar (USD) could drop further to 151.30; it remains to be seen if 151.00 will come into view. In the longer run, USD could weaken, but any decline is likely part of a lower range of 151.00/152.70, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Any decline is likely part of a lower range of 151.00/152.70
24-HOUR VIEW: “We did not expect USD to drop sharply to 151.73 yesterday (we were expecting range-trading). USD closed at 152.10 (-0.50%) but fell further in the early Asian session today. Strong momentum suggests USD may drop further to 151.30. A break below this level is not ruled out, but given the oversold conditions, it remains to be seen if the next support at 151.00 will come into view. To maintain the oversold momentum, USD must hold below 152.35, with minor resistance at 152.10.”
1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (24 Oct, spot at 152.60), in which we highlighted that ‘upward momentum is starting to build, but USD must close above 153.00 before a sustained rise can be expected.’ Our condition was not met, and yesterday, USD fell sharply and broke below our ‘strong support’ level at 152.00. Short-term downward momentum is increasing, and USD could weaken from here, but currently, we view any decline as part of a lower range of 151.00/152.70. In other words, USD may not be able to break below 151.00.”