The US Dollar (USD) is expected to continue trading within a volatile range of 157.30 to 160.00, with potential for further weakening. Analysts Quek Ser Leang and Peter Chia from UOB Group FX have highlighted that while there is scope for the USD to weaken, it is too early to determine if the critical support level at 155.50 will be tested.
Near-Term Outlook: Downside Bias Below 161.00
The USD exhibited extreme volatility recently, plunging to 157.41 before rebounding and closing significantly lower at 158.80, a drop of 1.78%. This sharp fluctuation has created a mixed outlook, suggesting that the USD may continue to trade in a volatile manner within the range of 157.30 to 160.00 in the near term.
1-3 Weeks Outlook: Uncertain Break Below 161.00
On July 11th, with the USD at 161.55, it was indicated that while upward momentum was building, a sustained advance would require the USD to break and close above 162.00. The likelihood of such a break was deemed low unless 160.60 remained unbreached. However, the USD not only fell below 160.60 but also hit a low of 157.41. This significant decline suggests a continued downside bias for the USD, provided it remains below 161.00.
While the possibility of further weakening is evident, it is premature to predict if the significant support level at 155.50 will come into play. The near-term outlook remains bearish as long as the USD stays below the 161.00 mark.
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