Strong momentum suggests the US Dollar (USD) could decline further, potentially reaching 142.80. And, there’s also the chance of it reaching 141.66, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
Bears may try to reach 142.80 short term
24-HOUR VIEW: “Our view for USD to edge higher last Friday was incorrect. Instead of edging higher, it sold off sharply in NY trade, plummeting to a low of 144.04. USD continues to decline in early Asian trade today. Strong momentum indicates USD could potentially reach 142.80. The major support at 141.66 is unlikely to come under threat. To keep the momentum going, USD must remain below 145.00 (minor resistance is at 144.40).”
1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (22 Aug, spot at 145.25), we held the view that USD ‘is under pressure.’ However, we indicated that ‘it does not appear to have sufficient momentum to threaten 141.66, the low registered early this month.’ Last Friday, USD fell sharply, closing lower by 1.29% (144.37). There has been an increase in momentum and USD remains under pressure. Given the increase in momentum, the chance of USD dropping to 141.66 has increased as well. Overall, only a breach of 146.50 (‘strong resistance’ level previously at 148.00) would indicate that the current downward pressure has faded.”
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