24-hour view: We highlighted yesterday that USD “could drop further to 7.2870 before stabilisation can be expected.” Our expectation did not materialise as it traded sideways between 7.2929 and 7.3145 before closing largely unchanged at 7.2995 (-0.03%). Today, USD could continue to trade sideways, albeit likely in a wider range of 7.2870/7.3200. 

Next 1-3 weeks: After USD dropped sharply to a low of 7.2921 on Monday, we highlighted yesterday (12 Sep, spot at 7.3035) that “while it is premature to expect a major reversal, the sharp pullback could extend to 7.2600.” There is no change in our view. Overall, only a breach of 7.3520 would indicate that USD is not ready to pullback further.