The US Dollar (USD) could weaken further; any decline is unlikely to reach the strong support at 7.2000. In the longer run, momentum is beginning to slow; a breach of 7.2000 would mean that USD is not rising further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

A break below 7.2000 to stop USD gains

24-HOUR VIEW: “We held the view that USD ‘is likely to trade in a range of 7.2250/7.2500’ yesterday. USD then rose to 7.2529 before dropping sharply to a low of 7.2252. USD closed at 7.2260 (-0.23%). There has been a slight increase in momentum, and USD could weaken further. However, any decline is unlikely to reach the strong support at 7.2000 (there is another support level at 7.2180). On the upside, should USD break above 7.2460 (minor resistance is at 7.2390), it would mean that the current mild downward pressure has eased.”

1-3 WEEKS VIEW: “We have held a positive USD view for more than a week now. In our most recent narrative from last Wednesday (13 Nov, spot at 7.22470), we pointed out that ‘The level to monitor is 7.2800 and the next resistance above 7.2800 is at 7.3115.’ USD has not been able to make further headway since then, and momentum is beginning to slow. From here, if USD breaks below 7.2000 (no change in ‘strong support’ level) would mean that USD is not rising further.”