Additional US Greenback (USD) declines should not dominated out, however deeply oversold situations and tentative slowing of downward momentum might first result in consolidation, UOB Group’s FX analysts Quek Ser Leang and Peter Chia be aware.
Deeply oversold situations might result in consolidation
24-HOUR VIEW: “Whereas we indicated yesterday that USD ‘might weaken additional’, we identified that ‘given the deeply oversold situations, any decline is unlikely to interrupt beneath 143.00.’ Our directional name was not incorrect, however USD dropped greater than anticipated, reaching 142.78. Nevertheless, the decline was short-lived, with USD rebounding to shut 0.24% increased at 144.01. The rebound amid nonetheless oversold situations suggests the draw back threat has possible pale for now. At the moment, USD is more likely to consolidate in a variety between 143.40 and 144.70.”
1-3 WEEKS VIEW: “We revised our USD view to damaging two days in the past (21 Could, spot at 144.40). After USD swiftly exceeded our technical aims, we indicated yesterday (22 Could, spot at 143.90) that ‘regardless of being deeply oversold, downward momentum continues to point draw back threat towards 143.00.’ As soon as once more, USD rapidly exceeded our goal, dropping to 142.78 earlier than rebounding to snap its seven-day shedding streak with a 0.24% achieve (144.01). Whereas additional declines stay potential, deeply oversold situations and tentative slowing of downward momentum might first result in consolidation. That mentioned, yesterday’s low close to 142.80, is now appearing as a robust help degree. On the upside, a break above 145.05 (no change in ‘robust resistance’ degree) would point out a broader and longer consolidation section.”
