24-hour view: Yesterday, we held the view that USD “is likely to trade with a downward bias, but any decline is unlikely to break the major support at 7.2700.” However, USD broke below 7.2700 and plummeted to a low of 7.2498. While severely oversold, USD could weaken further. That said, the major support at 7.2380 is likely out of reach today. The downside risk is intact unless USD breaks above 7.2770 (minor resistance is at 7.2700). 

Next 1-3 weeks: Our most recent narrative was from last Friday (10 Nov, spot at 7.3020), wherein “the recent buildup in downward momentum has faded, and USD is likely to trade sideways between 7.2700 and 7.3320. Yesterday, USD broke below 7.2700 and plummeted to 7.2498. Downward momentum has increased, and USD is likely to weaken further to 7.2380. If USD breaks clearly below 7.2380, the focus will shift to 7.2000. In order to maintain the rapid momentum buildup, USD must not break above 7.3000.