24-hour view: While we expected USD to weaken yesterday, we were of the view that “any decline is likely to face strong support at 143.90.” The anticipated support did not materialize as USD plummeted to 143.54, bounced to 144.69 and then closed at 144.06. After the choppy price actions, the outlook for USD is mixed. Today, USD could continue to trade in a choppy manner, likely between 143.40 and 144.50.

Next 1-3 weeks: We have held a positive USD view since the middle of last month. In our latest narrative from Wednesday (05 Jul, spot at 144.50), we noted that “the USD strength is struggling to maintain its momentum, and the chance for extension to 145.50 appears low”. Yesterday (06 Jul), USD fell below our ‘strong support’ level at 143.90. The breach of the ‘strong support’ indicates that the 3-week USD strength has ended. From here, we expect USD to trade in a range, likely between 142.90 and 145.00.