The US Dollar (USD) could weaken further; any decline is unlikely to reach the strong support at 7.2000. In the longer run, momentum is beginning to slow; a breach of 7.2000 would mean that USD is not rising further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Below 7.2000 USD is set to stop rising further

24-HOUR VIEW: “We noted yesterday that ‘there has been a slight increase in momentum.’ We were of the view that USD ‘could decline further, but any decline is unlikely to reach the strong support at 7.2000.’ Our view did not turn out, as USD traded in a sideways range of 7.2250/7.2488, closing at 7.2331 (+0.10%). We continue to detect a soft underlying tone, and we continue to hold the view that USD could weaken. However, the strong support at 7.2000 is still likely out of reach (there is another support level at 7.2180). Resistance levels are at 7.2400 and 7.2490.”

1-3 WEEKS VIEW: “After expecting a higher USD for more than a week, we indicated on Monday (18 Nov, spot at 7.2350) that ‘momentum is beginning to slow, and if USD breaks below 7.2000 (‘strong support’ level) would mean that USD is not rising further.’ Our view remains unchanged.”