The US Dollar (USD) could strengthen further, but it remains to be seen if it can maintain the rapid pace of advance. The level to monitor is 7.1200, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

USD can strengthen further

24-HOUR VIEW: “Last Friday, USD surged to a high of 7.1036. Yesterday (Monday), we indicated that ‘the sharp and swift rally appears to be overdone, and USD is unlikely to rise much further.’ We expected USD to ‘trade in a range between 7.0700 and 7.1050.’ However, instead of trading in a range, USD sold off sharply to a low of 7.0583, closing at 7.0724 (-0.38%). This time around, the sharp drop appears to be overdone, and instead of continuing to decline, USD is expected to trade in a 7.0590/7.0800 range.”