USD is expected to trade in a range between 7.1200 and 7.1550, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
No increase in downward momentum
24-HOUR VIEW: “When USD was at 7.1475 yesterday, we noted that ‘the underlying tone has softened.’ However, we were of the view that ‘any decline is likely part of a lower range of 7.1380/7.1520 rather than a sustained decline.’ We did not expect the mild downward momentum to strengthen so quickly, as USD fell to a low of 7.1242, before rebounding to close at 7.1377 (-0.17%). The rebound from oversold conditions suggests that instead of weakening further, USD is more likely to range-trade today, probably between 7.1300 and 7.1480.”
1-3 WEEKS VIEW: “We turned positive on USD two days ago (08 Oct, spot at 7.1475). We indicated that ‘the price action suggests that USD could rise toward 7.1650.’ We pointed out that ‘we will maintain the same view provided that the ‘strong support’ at 7.1330 is not breached.’ Yesterday, in a surprising move, USD broke below 7.1330 and reached a low of 7.1242. Upward momentum has faded, but as there has been no increase in downward momentum, we expect USD to trade in a range for now, most likely between 7.1200 and 7.1550.”
