It may drop towards the 142.80 support – UOB Group

Strong momentum suggests that the US dollar (USD) could fall further, potentially reaching 142.80. And, there is also a chance it could hit 141.66, note UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.

Bears may try to reach 142.80 in the short term

24-HOUR VIEW: “Our view that the USD would rise last Friday was incorrect. Instead of rising, it sold off sharply in NY trade, falling to a low of 144.04. The USD continues to fall in early Asian trade today. Strong momentum indicates USD could reach 142.80. Major support at 141.66 is unlikely to be threatened. To maintain the momentum, the USD needs to stay below 145.00 (minor resistance is at 144.40).

WEEKS 1-3: “In our most recent narrative last Thursday (August 22, 145.25), we thought the USD was ‘under pressure’. However, we indicated that it “does not appear to have enough momentum to threaten 141.66, the low seen earlier this month.” Last Friday, the USD fell sharply, closing down 1.29% (144.37). There has been an increase in momentum and the USD remains under pressure. Given the increased momentum, the chance of the USD falling to 141.66 has also increased. Overall, only a break of 146.50 (the previous ‘strong resistance’ level at 148.00) would indicate that the current downward pressure is gone.”