Room for the sharp rally to test 7.2800 before levelling off; the next resistance at 7.3000 is unlikely to come into view. 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 analysts Quek Ser Leang and Lee Sue Ann note.
There’s room for a test of 7.2800 before levelling off
24-HOUR VIEW: “USD indicated the following yesterday: ‘The outlook is mixed, and today, we expect USD to trade between 7.2300 and 7.2600.’ USD then traded in a narrower range of 7.2360/7.2577. USD closed at 7.2466, but jumped shortly after opening in Asian trade today. While USD could continue to advance, the sharp and swift rally appears to be overextended. That said, there is room for USD to test the major resistance at 7.2800 before levelling off. The next resistance at 7.3000 is unlikely to come into view. On the downside, support levels are at 7.2550 and 7.2430.”
1-3 WEEKS VIEW: “We have held a positive view for more than two weeks now. In our latest narrative from last Monday (18 Nov, spot at 7.2350), we indicated that ‘momentum is beginning to slow, and if USD breaks below 7.2000 (‘strong support’ level) would mean that USD is not rising further.’ USD traded in a relatively quiet manner until today, when in a sudden move, it soared. Momentum is building again, and USD could break above 7.2800. At this time, it is too early to determine whether there is enough momentum for it to reach 7.3115 (there is another resistance at 7.3000). Meanwhile, the ‘strong support’ level has moved higher to 7.2200.”
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