Firmed underlying tone is likely to lead to US Dollar (USD) trading in a higher range of 152.40/153.30. In the longer run, upward momentum is starting to build, but for a continued advance, USD must first close above 153.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is starting to build
24-HOUR VIEW: “We expected USD to ‘consolidate between 152.00 and 152.85’ last Friday. However, USD traded in a range of 152.31/153.06. The underlying tone has firmed somewhat, but this is likely to lead to a higher range of 152.40/153.30 rather than a sustained advance.”
1-3 WEEKS VIEW: “Last Friday (24 Oct, spot at 152.60), we indicated the following: ‘Upward momentum is starting to build, but USD must close above 153.00 before a sustained rise can be expected. The odds of USD closing above 153.00 will remain intact as long as 151.50 (‘strong support’ level) is not breached. Looking ahead, a clear break above 153.00 will increase the likelihood of USD rising above the high seen earlier this month, near 153.30.’ USD subsequently rose to 153.06 before closing at 152.85 (+0.18%). Upward momentum continues to build, but we prefer to wait for a close above 153.00 before adopting a positive stance. On the downside, the ‘strong support’ level is now at 152.00 instead of 151.50.”