Recent price movements indicate ongoing weakness for the US Dollar (USD), though it’s premature to confirm whether the long-term support level near 7.0980 will be tested, according to UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
24-Hour Outlook: The USD’s sharp decline last Friday was unexpected, as sideways trading was anticipated. The current drop is considered oversold, but further weakness is possible. However, the support level at 7.1100 is expected to hold. Resistance is set at 7.1650; a break above 7.1900 would suggest that the current weakness might be stabilizing.
1-3 Weeks Outlook: Previously, on August 1 (with the USD at 7.2200), the analysts noted increasing short-term downward momentum and a rising risk of the USD falling below 7.2037. The risk was deemed persistent as long as the strong resistance at 7.2600 was not breached. Although the USD briefly rebounded to a high of 7.2579, it then dropped below 7.2037 and reached a low of 7.1415. Current price action continues to signal potential further weakness in the USD. However, it’s too soon to determine if the support near 7.0980 will be tested. On the upside, the strong resistance level has been adjusted to 7.2200 from 7.2600.
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