Major resistance at 145.50 is probably unreachable – UOB Group

Strong momentum suggests further US dollar (USD) strength; major resistance at 145.50 is likely unreachable. Longer-term, the sharp advance reinforces the view that the USD could bounce back to 145.50, note UOB Group FX strategists Quek Ser Leang and Peter Chia.

USD may further recover to 145.50

24 HOUR VIEW: “Our view for the USD to trade in a 141.50/143.80 range last Friday was incorrect. The USD fell to a low of 141.72 and then rose to a high of 144.49. As the rally reaches overbought levels, strong momentum suggests further USD strength. However, any further advance is unlikely to reach major resistance at 145.50 (there is another resistance level at 144.80). To maintain momentum, USD needs to stay above 143.10 with minor support at 143.60.”

WEEKS 1-3: “Last Thursday (Sept 19), when the USD was trading at 143.00, I indicated that ‘if the USD can break clear above 144.00, it could trigger a stronger recovery towards 145.50.’ I added, “the likelihood of the USD breaking clear above 144.00 will remain intact, provided the ‘strong support’ level at 141.00 is not breached.” On Friday, the USD broke clear above 144.00, reaching a high of 144.49. The strong advance reinforces our view that the USD could further recover to 145.50. On the downside, the ‘strong support’ level rose to 141.90 from 141.00.”