The current price movements still appear to be part of a consolidation phase, likely between 146.90 and 148.00. In the longer run, sharp drop in USD has scope to extend, but any decline may not break below 145.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Sharp drop in USD has scope to extend

24-HOUR VIEW: "When USD was at 147.50 yesterday, we stated that 'the current price movements are likely part of a consolidation phase, probably between 147.00 and 148.20.' USD subsequently traded in a narrower range than expected (146.95/147.88), before closing slightly lower by 0.17% at 147.35. The price movements still appear to be part of a consolidation phase, likely between 146.90 and 148.00."

1-3 WEEKS VIEW: "In our most recent narrative from Monday (04 Aug, spot at 147.25), we highlighted that 'the sharp drop in USD from last Friday has scope to extend.' However, we pointed out that 'any decline may not break below 145.80.' We continue to hold the same view. Overall, only a breach of 148.60 (‘strong resistance’ level was at 149.00) would indicate that the scope for the sharp drop to extend has faded."