US Dollar (USD) could weaken, but it is unclear whether there is enough momentum for it to break below 152.40. In the longer run, USD is likely to trade with a downward bias; if it breaks below 152.40, it could trigger a rapid decline to 152.00, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Below 152.40, USD/JPY might trigger a rapid decline to 152.00
24-HOUR VIEW: "USD rose sharply to a high of 154.14 two days ago. Yesterday, we stated that 'we are not able to derive much insight from the price action', and we stated that USD 'could trade in a range between 153.30 and 154.40'. The subsequent price movements did not quite turn out as expected, as after rising to a high of 154.14, USD plummeted to a low of 152.81. Downward momentum is building, and USD could weaken today. However, it is unclear whether there is enough momentum for a break below the major support at 152.40. Resistance levels are at 153.30 and 153.60."
1-3 WEEKS VIEW: "We highlighted on Wednesday (05 Nov, spot at 153.55) that USD 'appears to have entered a range-trading phase, and for the time being, it is likely to trade between 152.40 and 154.40'. USD subsequently rose to 154.35 and then pulled back. Yesterday, USD pulled back further to a low of 152.81. Downward momentum is building, but it is not enough to indicate a sustained decline. That said, USD is likely to trade with a downward bias for now, and if it breaks below 152.40, it could trigger a rapid decline to 152.00. To sustain the momentum buildup, USD must hold below the ‘strong resistance’ level, currently at 154.10."
