To trade lower but not below 7.0600 – UOB Group

It is not unreasonable to expect further USD weakness, especially when there are no significant levels of support nearby, note UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.

Short-term levels to monitor are 6.9700 and 6.9400

24 HOURS: “Two days ago, the USD went down. Yesterday, I indicated that “further sharp declines look likely, and support is at 6.9700.” USD then fell to 6.9952 and then rebounded strongly. The recovery lacks momentum and instead of continuing to advance, the USD is more likely to trade in the 7.0180/7.0430 range today.”

WEEKS 1-3: “Our update from yesterday (September 25, spot at 6.9990) remains valid. As pointed out, after the recent sharp decline, it is not unreasonable to expect further USD weakness, especially when there are no significant support levels nearby. Meanwhile, short-term levels to monitor are 6.9700 and 6.9400. Overall, we will still expect the USD to decline, provided 7.0600 (no change to the ‘strong resistance’ level) is breached.”