There is scope for US Dollar (USD) to recover to 6.9805; a continued rise is unlikely. In the longer run, deeply oversold conditions and waning momentum suggest the downside potential could be limited to a test of 6.9590, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downside potential might be limited to a test of 6.9590

24-HOUR VIEW: "USD fell to a low of 6.9662 last Friday and then recovered to close largely unchanged at 6.9709 (-0.06%). USD continued to recover in the early Asian session today. While it is premature to expect a continued rise, there is scope for USD to rise toward 6.9805. Support levels are at 6.9690 and 6.9650."

1-3 WEEKS VIEW: "The sharp decline in USD last month appears to be overextended. Although there is no clear sign of stabilisation yet, deeply oversold conditions and waning downward momentum, suggests the downside potential could be limited to a test of 6.9590. Conversely, on the upside, if USD breaks above 6.9950 (‘strong resistance’ level), it would indicate that the weakness in USD is stabilising."