USD Weakens as Downward Momentum Grows
As the USD faces oversold conditions, analysts at UOB Group, including Quek Ser Leang and Lee Sue Ann, predict a potential weakening of the currency. Despite a recent increase in downward momentum, the decline may not be drastic, as outlined below.
24-HOUR VIEW:
- Yesterday’s trading saw the USD plummet to 152.97 before closing at 153.10, marking a 0.72% decrease.
- Strong downward momentum indicates a likelihood of further weakness in the USD.
- However, due to oversold conditions, any decline may struggle to break below 152.50.
- To sustain this momentum, the USD must stay below 153.80, with minor resistance at 153.40.
1-3 WEEKS VIEW:
- Recent analysis suggested a range-bound trading scenario between 153.30 and 156.50.
- USD broke below 153.30, closing at 153.10, signaling an increase in downward momentum.
- Potential for further decline, with a focus on whether the USD can reach major support at 151.60.
- As long as 154.35 is not breached, the outlook remains consistent with the current analysis.
Analysis of USD Movement
The USD’s weakening and increased downward momentum indicate potential shifts in the currency market. Investors should pay attention to these developments as they can impact various aspects of the financial landscape and individual portfolios.
- Market Volatility: A weakening USD can lead to increased market volatility, affecting asset prices and investment strategies.
- Global Trade: Currency movements, such as the USD weakening, can influence international trade dynamics and impact export-import balances.
- Interest Rates: Changes in currency values can influence central bank decisions on interest rates, affecting borrowing costs and investment returns.
By staying informed and monitoring these trends, investors can make educated decisions to optimize their portfolios and navigate the ever-changing financial markets.