The U.S. Dollar (USD) is projected to maintain a sideways trading pattern, fluctuating between 7.1970 and 7.2190. According to FX analysts Quek Ser Leang and Peter Chia from UOB Group, a sustained move above 7.2330 would diminish the probability of the USD depreciating towards 7.1700. This analysis reflects ongoing market uncertainty and the dollar’s struggle to establish a clear directional trend. The analysts suggest that traders should closely monitor these key levels for potential breakout signals.
Above 7.2330, the likelihood of declining to 7.1700 to fade
24-HOUR VIEW: “Yesterday’s assessment indicated that “While further sideways trading still seems likely, the firmer underlying tone suggests a higher range of 7.1950/7.2200.” As anticipated, the USD traded within a sideways pattern, although confined to a tighter range of 7.2031/7.2154. The subdued price action offers no new insights, and we maintain our expectation for the USD to continue trading sideways. The projected range for today is 7.1970/7.2190.” This short-term outlook emphasizes the lack of immediate catalysts to drive the dollar in either direction. Market participants are likely awaiting further economic data releases or policy announcements to provide clearer direction. The analysts’ focus remains on identifying potential breakout levels within this narrow range. 1-3 WEEKS VIEW: “We have maintained a negative outlook on the USD since the beginning of last week. In our most recent commentary from Tuesday, May 13 (spot at 7.2000), we highlighted that ‘the renewed downward momentum suggests 7.1700 could be back in sight.’ Since that time, the USD has struggled to make significant downward progress. However, only a break above 7.2330 (with no change in the ‘strong resistance’ level) would signal that the probability of the USD declining to 7.1700 has diminished.” This longer-term perspective underscores the importance of the 7.2330 level as a critical threshold. Should the USD decisively breach this resistance, it would negate the previously anticipated downward trajectory and potentially pave the way for a more bullish outlook. Conversely, failure to overcome this level would reinforce the bearish sentiment and increase the likelihood of a move towards 7.1700. Investors are advised to monitor upcoming economic indicators, such as inflation figures and employment data, which could influence the dollar’s performance in the coming weeks. Furthermore, any shifts in monetary policy from the Federal Reserve could also significantly impact the USD’s direction.
