Instead of continuing to rise, the US Dollar (USD) is likely to trade in a sideways range between 7.2450 and 7.2660. In the longer run, momentum is building again; USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.
USD likely to trade between 7.2450 and 7.2660
24-HOUR VIEW: “After USD soared in early Asian trade yesterday, we indicated that ‘the sharp and swift rally appears to be overextended.’ However, we were of the view that ‘there is room for USD to test the major resistance at 7.2800 before levelling off.’ While USD rose as expected, it only reached a high of 7.2730 before pulling back. Upward pressure appears to have eased with the pullback. Today, instead of continuing to advance, USD is more likely to trade in a sideways range of 7.2450 and 7.2660.”
1-3 WEEKS VIEW: “Yesterday (26 Nov, spot at 7.2630), we noted that “momentum is building again.” We added, “USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach.” We continue to hold the same view. On the downside, a breach of 7.2200 (no change in ‘strong support’ level), would mean that the USD strength from early this month has ended.”
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