The US Dollar (USD) could decline further; it remains to be seen if 154.50 will come into view (there is another support level at 155.15), UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
The level to watch is 154.50
24-HOUR VIEW: “We did not anticipate the outsized selloff that sent USD plunging to a low of 156.05. USD continues to decline in early Asian trade today. Given the impulsive downward momentum, it could decline further, but note that conditions are severely oversold, and it remains to be seen if 154.50 will come into view (there is another support level at 155.15). To keep the momentum going, USD must remain below 157.30 with minor resistance at 156.60.”
1-3 WEEKS VIEW: “In our most recent narrative from last Friday (12 Jul, spot at 159.00), we highlighted that ‘there is scope for JPY to continue to weaken, but it is too early to determine if the significant support level at 155.50 will come into view.’ We added, ‘All in all, the near-term bias is on the downside, as long as USD remains below 160.00.’ Yesterday, USD plunged to a low of 156.05. Today, in early Asian trade, it fell further and broke below 155.50. While severely oversold, the risk is for further USD weakness. The level to watch is 154.50, followed by 153.95. On the upside, the ‘strong resistance’ level has moved lower to 158.50 from 160.00.”
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