The US Dollar (USD) is likely to trade in a range between 152.45 and 153.60. In the longer run, while conditions are severely overbought, there is a chance for the advance in USD to extend to 154.00 before pausing, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Conditions are severely overbought
24-HOUR VIEW: “We expected USD to ‘rise above the major resistance at 153.40’ yesterday. However, we pointed out that ‘the major resistance at 154.00 is likely out of reach.’ Our view was not wrong, as USD rose to 153.87, pulling back to close at 153.28 (+0.64%). The pullback in overbought in overbought conditions suggests USD is unlikely to rise further. Today, USD is more likely to trade in a range between 152.45 and 153.60.”
1-3 WEEKS VIEW: “We have expected a higher USD since early this month. As we tracked the advance, in our most recent narrative from last Thursday (24 Oct, spot at 152.60), we indicated that ‘upward momentum remains strong, and the next level to monitor is 153.40, followed by 154.00.’ Yesterday, USD broke above 153.40, reaching a high of 153.87. While conditions are severely overbought, there is a chance for the advance in USD to extend to 154.00 before pausing. On the downside, a breach of 151.90 (‘strong support’ level previously at 151.50) would indicate that USD is not strengthening further.”
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