The US Dollar (USD) could continue to trade in a volatile manner between 157.30 and 160.00. Scope for USD to continue to weaken; it is too early to determine if the significant support at 155.50 will come into view, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Near-term bias is on the downside below 161.00

24-HOUR VIEW: “The extreme volatility yesterday was surprising, as USD nosedived to 157.41 before snapping back up, closing sharply lower at 158.80 (-1.78%). The wild swings have resulted in a mixed outlook, and USD could continue to trade in a volatile manner. Expected range for today, 157.30/160.00.”

1-3 WEEKS VIEW: “Yesterday (11 Jul, spot at 161.55), we indicated that while upward momentum is building, USD ‘has to break and close above 162.00 before a sustained advance is likely.’ We added, ‘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.’ However, USD not only broke below 160.60, but it also plunged to a low of 157.41. While the outsized decline suggests there is scope for JPY to continue to weaken, it is too early to determine if the significant support level at 155.50 will come into view. All in all, the near-term bias is on the downside, as long as USD remains below 161.00.”