Upward momentum continues to increase; if US Dollar (USD) breaks above 7.1500, the next level to watch is 7.1600, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum continues to increase
24-HOUR VIEW: “When USD was at 7.1435 in the early Asian session last Friday, we stated that ‘there is scope for USD to test 7.1500 before a pullback can be expected.’ We also indicated that ‘based on the overbought momentum, the next major resistance at 7.1600 is unlikely to come into view.’ However, USD rose less than expected to 7.1474 before pulling back. The pullback is likely part of a range-trading phase. Today, we expect USD to between 7.1300 and 7.1430.”
1-3 WEEKS VIEW: “Last Friday (26 Sep, spot at 7.1435), we highlighted that ‘upward momentum continues to increase, and if USD breaks above 7.1500, the next level to watch is 7.1600.’ USD subsequently rose to a high 7.1474 before closing largely unchanged at 7.1409 (-0.09%). We will maintain our view, as long as the ‘strong support’ at 7.1250 (no change in level) holds. A break of 7.1250 would indicate that the USD strength from early last week has ended.”