US Dollar (USD) is likely to trade in a range between 7.1080 and 7.1240. In the longer run, room for USD to drop below 7.1100; any decline is likely to be slow, and 7.1000 may not come into view so soon, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Any decline is likely to be slow
24-HOUR VIEW: “We expected USD to ‘trade in a range between 7.1100 and 7.1250’ yesterday. USD then traded in a range of 7.1127/7.1260 before closing largely unchanged at 7.1131 (-0.09%). The price action provides no fresh clues. Today, we expect USD to trade between 7.1080 and 7.1240.”
1-3 WEEKS VIEW: “We have held the same view since Monday (08 Sep, spot at 7.1285), in which we highlighted that ‘while the downward bias is building, USD must first close below 7.1100 before a sustained decline can be expected.’ Since then, USD has been edging lower, and while there is room for USD to drop below 7.1100, given that there has been no significant increase in downward momentum, the pace of any decline is likely to be slow. The major support at 7.1000 may not come into view so soon. On the upside, if USD breaks above 7.1350 (‘strong resistance’ level previously at 7.1400), it would indicate that it is likely to trade in a range rather than edging lower.”