24-hour view: Our view for USD “to continue to fall” last Friday and that “137.15 is likely within reach” were incorrect. USD fell to 137.23 and then staged a sharp rebound and closed higher for the first time in six days. The rebound in severely oversold conditions suggests USD is unlikely to weaken. Today, USD is more likely to trade in a range of 137.80/139.00.

Next 1-3 weeks: Last Friday (14 Jul, spot at 137.80), we held the view that USD “is likely to break below 137.15 and that the next level to aim for is the formidable support at 135.80.” USD then dropped to a low of 137.28 before staging a surprisingly sharp rebound (high of 139.15). While downward momentum has slowed somewhat, we continue to hold the same view for now. However, if USD breaks above 139.50 (no change in ‘strong resistance’ level from last Friday), it would indicate that the USD weakness that started early last week has stabilized.