US Dollar (USD) is likely to edge higher, but any advance is unlikely to reach the major resistance at 7.2330. In the longer run, downward momentum has largely faded; USD is likely to trade in a 7.1850/7.2450 range for now, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Advance is unlikely to reach 7.2330
24-HOUR VIEW: “Yesterday, we expected USD to ‘trade in a sideways range of 7.1990/7.2190.’ Our call for sideways trading was not wrong, even though USD traded in a narrower range than expected (7.2042/7.2178), closing largely unchanged (7.2140. +0.06%). Despite the quiet price action, there has been a tentative buildup in upward momentum. Today, USD is likely to edge higher, but as momentum is not strong, any advance is unlikely to reach the major resistance at 7.2330. There is another resistance level at 7.2250. Support is at 7.2100, followed by 7.2000.”
1-3 WEEKS VIEW: “We have held a negative USD view since early this month. In our most recent narrative from last Friday (16 May, spot at 7.2040), we highlighted that USD ‘has not been able to make significant headway on the downside.’ We added, ‘However, only a breach of 7.2330 (‘strong resistance’ level) would indicate that the likelihood of USD declining to 7.1700 has faded.’ Although 7.2330 has not been breached yet, after the quiet price action over the past couple of days, downward momentum has largely faded. Instead of weakening, USD is likely to trade in a 7.1850/7.2450 range for now.”
