There is a chance for US Dollar (USD) to retest 144.50 before a more sustained recovery can be expected. In the longer run, USD appears to have moved into a range trading phase between 143.50 and 146.50, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
USD appears to have moved into a range trading phase
24-HOUR VIEW: “USD rose to 148.02 on Monday and then plunged. Yesterday, when it was at 145.60, we noted that ‘while further declines are not ruled out, conditions are deeply oversold, and a break of the strong support at 145.05 seems unlikely.’ The stronger than expected momentum outweighed the oversold conditions, as USD dropped to 144.49 before recovering to close lower by 0.81% at 144.91. While conditions remain deeply oversold, downward momentum appears to be slowing, albeit tentatively. From here, there is a chance for USD to retest the 144.50 level before a more sustained recovery can be expected. A dip below this level is not ruled out, but based on the current momentum, any further weakness is unlikely to reach 144.00. On the upside, resistance levels are at 145.20 and 145.55.”
1-3 WEEKS VIEW: “We have held a positive USD view since late last week (see annotations in the chart below). After USD rose to 148.02 and then plunged on Monday, we indicated yesterday (24 Jun, spot at 145.60) that ‘as long as 145.05 is not breached, there is a slim chance for USD to rise to 148.00 again.’ USD subsequently broke below 145.05, as it dropped to a low of 144.49. USD appears to have moved into a range trading phase. For the time being, we expect USD to trade between 143.50 and 146.50.”
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