Further US dollar strength is not ruled out; Any advance may not reach 157.20. In the longer term, the US dollar should close above 157.20 before a move to 157.90 is expected, UOB Group FX analysts Kwek Ser Liang and Peter Chia noted.
The dollar must close above 157.20 before moving to 157.90
24-hour view: “When the US dollar was at 155.85 in the early Asian session yesterday, we were of the view that it ‘might go higher’. However, we noted that ‘the momentum does not look strong enough to clearly break above 156.20’. We did not expect the bullish momentum to accelerate so quickly, as the US dollar rose to a high of 156.95. While US dollar strength is not ruled out, conditions are in the significantly overbought zone, and the US dollar may not reach 157.20 Today to maintain momentum, the dollar must settle above 156.30, with minor support at 156.55.”
1-3 week view: “In our latest narrative from last Thursday (04 Dec, spot at 155.20), we highlighted that “For a sustained decline, the USD must first close below 154.65.” While the USD fell below 154.65 several times, it never closed below that level. Yesterday, the USD rose above the “strong resistance” level at 156.20 and then closed at 154.65. The initial bearish pressure dissipated. At 156.86, there has been a rapid increase in bullish momentum, but this time, the USD must close above 157.20 before a move to 157.90 is expected, and the probability of the USD closing above 157.20 is expected to increase in the next few days as long as the “strong support” level is not breached now at 155.80.
