The US Dollar (USD) could drop further, but it does seem to have enough momentum to threaten the major support at 151.05. In the longer run, USD advance from early last month has ended; it must break and remain below 151.05 before a more sustained decline can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Has a chance to test 151.05
24-HOUR VIEW: “Yesterday, USD dropped sharply, closing lower by 0.90% at 152.03. Despite the relatively sharp decline, downward momentum has not increased much. However, provided that it remains below 152.85 (minor resistance is at 152.45), USD could drop further. That said, it does not seem to have enough momentum to threaten the major support at 151.05 (there is another support level at 151.50).”
1-3 WEEKS VIEW: “Our latest narrative was from Tuesday (29 Oct, spot at 153.05), wherein ‘while conditions are severely overbought, there is a chance for the advance in USD to extend to 154.00 before pausing.’ We added, ‘only a breach of 151.90 (‘strong support’ level) would indicate that the USD advance that started early this month has ended.’ Yesterday, USD broke below 151.90, reaching a low of 151.83 Not only has upward momentum faded, but downward momentum is beginning to build. However, at this stage, we view any decline is part of a pullback and not a major reversal. USD has to break and remain below 151.05 before a more sustained decline can be expected. The chance of USD breaking clearly below 151.05 will increase in the next few days as long as 153.35 is not breached.”
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