US Dollar (USD) is likely to trade in a range of 7.1160/7.1330. In the longer run, room for USD to drop below 7.1100; any decline is likely to be slow, and 7.1000 may not come into view so soon, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Room for USD to drop below 7.1100
24-HOUR VIEW: “We expected USD to ‘trade in a range between 7.1080 and 7.1240’ last Friday. However, after dipping briefly to 7.1128, USD rebounded strongly to a high of 7.1296. Upward momentum has increased, but not significantly. Today, we expect USD to trade in a higher range of 7.1160/7.1330.”
1-3 WEEKS VIEW: “Last Monday (08 Sep, spot at 7.1285), we indicated that ‘downward bias is building, but USD must first close below 7.1100 before a sustained decline can be expected.’ USD subsequently edged lower, and we highlighted last Friday (12 Sep, spot at 7.1140) that ‘there is room for USD to drop below 7.1100.’ However, we pointed out that ‘given that there has been no significant increase in downward momentum, the pace of any decline is likely to be slow.’ We added, ‘the major support at 7.1000 may not come into view so soon.’ We will maintain the same view as long as 7.1350 (no change ‘strong resistance’ level) is not breached.”
