Slight increase in momentum is likely to lead to US Dollar (USD) trading in a higher range of 7.1800/7.1950. In the longer run, downward momentum is building; for a continued decline, USD must first close below 7.1700, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Slight increase in momentum is likely to lead USD to trade in a higher range
24-HOUR VIEW: “Following last Thursday’s price movements, we pointed out on Friday that ‘momentum indicators are turning flat.’ We expected USD to ‘trade in a sideways range of 7.1750/7.1880.’ USD then traded between 7.1780 and 7.1896.’ This time around, there has been a slight increase in upward momentum. That said, this is likely to lead to a higher range of 7.1800/7.1950 instead of a continued advance.”
1-3 WEEKS VIEW: “Our most recent narrative was from last Thursday (14 Aug, spot at 7.1800), in which ‘downward momentum is building, but for a continued decline, USD must first close below 7.1700.’ Aside from a brief dip to a low of 7.1690, USD has not been able to make much headway on the downside. From here, if USD breaks above 7.1950 (no change in ‘strong resistance’ level), it would mean that it is likely to range trade instead of declining.”
