24-hour view: While we expected USD to weaken further yesterday, we were of the view that “the major support at 7.2380 is likely out of reach.” In NY trade, USD dropped sharply but briefly to 7.2385 before rebounding. The rebound in oversold conditions suggests USD is unlikely to weaken. Today, USD is more likely to trade in a sideways range of 7.2470/7.2700. 

Next 1-3 weeks: Yesterday (15 Nov, spot at 7.2600), we highlighted that “downward momentum has increased, and USD is likely to weaken further to 7.2380.” We added, “If USD breaks clearly below 7.2380, the focus will shift to 7.2000.” We continue to hold the same view. Note that USD dipped briefly to 7.2385 in NY trade before rebounding. On the upside, if USD breaks above 7.3000 (no change in ‘strong resistance’ level), it would indicate that current downward momentum has faded.