US Dollar (USD) could test the 7.2400 level before a more sustained rebound is likely. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current price movements are likely part of range trading

24-HOUR VIEW: “We noted yesterday that USD ‘is under mild downward pressure and could edge lower to 7.2540.’ However, we were of the view that ‘the major support at 7.2400 is unlikely to be tested.’ USD subsequently fell more than expected to 7.2420 before rebounding to close at 7.2609, lower by 0.10%. There has been a slight increase in momentum. Today, USD could test the 7.2400 level before a more sustained rebound is likely. A sustained break below 7.2400 appears unlikely. On the upside, should USD break above 7.2750 (minor resistance is at 7.2660), it would suggest that USD is not weakening further.”

1-3 WEEKS VIEW: “Current price movements are likely part of range trading, probably between 7.2400 and 7.2900. Our most recent narrative was from last Friday (06 Dec, spot at 7.2660), wherein ‘the current price movements are likely part of range trading, probably between 7.2400 and 7.2900.’ Yesterday, USD dropped to a low of 7.2420 before rebounding. The slight increase in momentum is not enough to indicate a sustained decline. Looking ahead, if USD were to break clearly below 7.2400, it could trigger further decline to 7.2200.”