Instead of continuing to rise, the US Dollar (USD) is likely to trade in a sideways range of 161.25/161.80. Upward momentum is building, but USD has to break and close above 162.00 before a sustained advance is likely, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

A break above 162.00 is not ruled out

24-HOUR VIEW: “We highlighted yesterday that USD ‘is likely to edge higher.’ However, we were of the view that ‘any advance is unlikely to break above the major resistance at 161.80.’ USD rose more than expected, reaching a high of 161.82. The advance appears to be running ahead of itself, and instead of continuing to rise, USD is likely to trade in a sideways range of 161.25/161.80.”

1-3 WEEKS VIEW: “On Monday (08 Jul, spot at 160.65), we indicated that the USD strength from the middle of last month has come to an end. We also indicated that ‘the current price movements are likely part of a range trading phase, and USD is likely to trade between 159.40 and 161.80.’ Yesterday, USD rose a couple of pips above 161.80. Upward momentum appears to be building, but at this time, it is not sufficiently strong to suggest a resumption of USD strength. USD has to break and close above 162.00 before a sustained advance is likely. The likelihood of USD breaking clearly above 162.00 is not high for now, but it will remain intact as long as 160.60 is not breached.”