Upward momentum is slightly firm, and US Dollar (USD) could test 154.50; a clear break above this level is unlikely. In the longer run, sharp increase in upward momentum could lead to further USD advance toward 154.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Sharp increase in upward momentum might lead to USD advance
24-HOUR VIEW: "USD soared to a high of 154.44 last Thursday. On Friday, when USD was at 153.90, we stated that 'although the sharp rise appears excessive, USD could test the 154.50 level before a pullback can be expected'. We added, 'to sustain the momentum, USD must hold above 153.30 (with minor support at 153.60)'. Our expectations did not quite materialise, as USD traded between 153.63 and 154.41, closing largely unchanged at 154.00 (-0.08%). Upward momentum is still slightly firm, and we continue to expect USD to test 154.50. However, a clear break above this level is unlikely. Today’s support levels are at 153.90 and 153.65."
1-3 WEEKS VIEW: "After USD soared last Thursday, we highlighted last Friday (31 Oct, spot at 153.90) that 'the sharp increase in upward momentum could lead to further advance toward 154.90'. Although there has been no further increase in momentum, we will maintain our view as long as 153.00 (‘strong support’ level previously at 152.50) is not breached."
