Price action continues to suggest USD weakness – UOB Group

The US dollar (USD) is likely to fall; No decline is expected to touch support at 6.9400. Longer term, price action continues to suggest USD weakness, albeit likely at a slower pace; levels to monitor are 6.9400 and 6.9200, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

The levels to monitor are 6.9400 and 6.9200

24 HOUR VIEW: “Last Thursday, the USD fell and closed sharply lower. Last Friday, we indicated that “the excessive decline has led to oversold conditions, and the USD is unlikely to weaken much further.” We expected the USD to “trade in a range between 6.9700 and 7.0100”. USD later traded in a narrower than expected range (6.9725/7.0040). Despite closing slightly higher at 6.9806 (+0.11%), the underlying tone appears to have softened. Today, we expect the USD to move lower, but any downside is unlikely to touch support at 6.9400 (there is a minor level of support at 6.9580). Resistance is at 6.9930, followed by 7.0050.”

WEEKS 1-3 VIEW: “We continue to maintain the same view as last Friday (Sept 27, spot at 6.9810). As indicated, recent price action continues to suggest USD weakness, albeit likely at a slower pace. The levels to monitor are 6.9400 and 6.9200. On the other hand, a break of 7.0350 (the “strong resistance” level was at 7.0450 last Friday) would mean that the USD is not weakening further.”