Set to trade in a range of 152.50/153.85 – UOB Group

Sharp pullback appears to be overextended; instead of continuing to weaken, the US Dollar (USD) is likely to trade in a range of 152.50/153.85. In the longer run, upward momentum has slowed sharply and quickly; a break of 152.50 would mean that USD is likely to trade in a range instead of heading higher, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Sharp pullback appears to be overextended

24-HOUR VIEW: “When USD was at 154.55 yesterday, we indicated that ‘the overbought USD rally could extend above 155.00 before pausing.’ However, USD did not rise above 155.00. Instead, it pulled back sharply to 152.69. The pullback appears to be overextended, and USD is unlikely to weaken much further. Today, USD is more likely to trade in a range between 152.50 and 153.85.”

1-3 WEEKS VIEW: “We highlighted yesterday (07 Nov, spot at 154.55) that’ the spike in momentum suggests USD could continue to rise, possibly to 156.00.’ The subsequent steep pullback was surprising, and upward momentum has slowed sharply and quickly. From here, if USD breaks below 152.50 (no change in ‘strong support’ level), it would mean that USD is likely to trade in a range instead of heading higher.”