Bears may break below 7.1150 towards 7.0636 – UOB Group

The US dollar (USD) is likely to trade sideways between 7.1150 and 7.1350. In the longer term, bearish momentum has increased sharply, suggesting there is potential for the USD to decline to 7.0636, note UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.

Potential downside towards 7.0636

24-HOUR OUTLOOK: Yesterday, we felt the USD “could fall further to 7.0900 before stabilization can be expected.” However, the USD fell less than expected, recovering from 7.1069 to 7.1251. USD closed at 7.1239 (+0.11%). The downward pressure appears to have faded. Today, the USD is likely to trade sideways, probably between 7.1150 and 7.1350.”

WEEKS 1-3: “Following the decline in the USD last Friday, we indicated yesterday (26 August, spot at 7.1100) that downside momentum has increased sharply, suggesting there is potential for the USD to fall to its July low of 7 ,0636. Although the USD has not made further progress to the downside, we continue to have the same view for now. Only a breach of 7.1460 (no change to the “strong resistance level from yesterday) would mean the USD was no longer falling.”