UOB Group’s foreign exchange analysts, Quek Ser Leang and Peter Chia, foresee a potential test of the US Dollar (USD) at the 7.1220 mark in the upcoming weeks, driven by a slight increase in upward momentum. Following a recent surge above 7.1170, they predict the currency will fluctuate within the range of 7.1020 to 7.1285.
The analysts’ observations highlight a significant shift in market sentiment. The USD’s recent performance indicates a potential stabilization of its earlier weakness, suggesting that it may be ready to establish a new trading range. The focus remains on identifying critical support and resistance levels to gauge future price action.
Short-Term Outlook for the USD
In the immediate 24-hour period, the analysts anticipate the USD may test the 7.1220 level. Previously, expectations were set for a narrower trading range between 7.1020 and 7.1170. However, the recent high of 7.1206 reflects a slight uptick in momentum, prompting a reassessment of the currency’s trajectory.
While a decisive break above 7.1220 is viewed as unlikely, key support levels at 7.1120 and 7.1080 are now critical. These levels will play a pivotal role in determining the USD’s direction and will indicate whether buying interest can emerge or selling pressure will persist. The USD’s movement will depend on the sustainability of this upward pressure or a potential retracement of recent gains.
Medium-Term Projections and Market Sentiment
Looking ahead to a one to three-week perspective, UOB analysts have updated their outlook following the USD’s breach of the 7.1170 threshold. Initially holding a negative view, the analysts now recognize a stabilization of the downward momentum that characterized the previous week. Surpassing 7.1170 has shifted the prevailing sentiment in the currency market.
Consequently, UOB Group’s analysts anticipate the USD will trade within a broader range of 7.1020 to 7.1285. This revised outlook reflects the change in momentum, suggesting the currency is more likely to consolidate within this range rather than revert to a prolonged downward trend. Their analysis incorporates technical aspects of the currency’s movements, along with the implications of breaking significant resistance levels.
As the market continues to respond to these dynamics, the focus will remain on whether the USD can solidify its position within the defined range or if it will face additional pressures that could lead to significant price movements.
