The US Dollar (USD) could rise above 7.2200; the next resistance at 7.2400 is unlikely to come into view. In the longer run, surge in momentum suggests further USD strength, but the pace and extent is likely to be more moderate. The level to watch is 7.2400, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
The level to watch on the upside is 7.2400
24-HOUR VIEW: “We indicated that despite USD surging in early Asian trade yesterday, ‘the impulsive advance could extend to 7.1550 before levelling off.’ However, USD surged further to 7.2095, closing on a strong note at 7.2040 (+1.48%). Not surprisingly, conditions are severely overbought. However, USD could rise above 7.2200. The next resistance at 7.2400 is unlikely to come into view. To maintain the momentum, USD must not break below 7.1600 (minor support is at 7.1800).”
1-3 WEEKS VIEW: “Yesterday (05 Nov, spot at 7.1340), we revised our negative view to neutral, indicating that ‘downward momentum has largely faded.’ We also indicate that USD ‘could trade in a broad 7.0900/7.1800 range.’ We clearly did not anticipate USD to lift off and skyrocketed to 7.2095. The surge in momentum suggests further USD strength, but severely overbought conditions suggest the pace and extent is likely to be more moderate. The level to watch on the upside is 7.2400. On the downside, should USD breach 7.1300, it would indicate that the rally is ready to take a breather.”
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