The USD is expected to remain between 7.1770 and 7.1970 in the short term. Analysts Quek Ser Leang and Peter Chia believe that in the long run, the USD will trade within a wider range of 7.1620 to 7.2200. In the last 24 hours, the USD was projected to range from 7.1700 to 7.1950 but ended up in a tighter range, indicating continued range trading. This aligns with the longer-term outlook.

Short Term Momentum

For the next 1-3 weeks, the momentum has eased, confirming that the USD is staying within the established range. Recent USD movements support this prediction. Keep in mind that market analysis involves risks and uncertainties. It’s important to do your own research before making any investment decisions. The information provided may not be completely accurate or timely. Investing in the open market carries risks, including the potential total loss of your investment, which you bear completely. The insights shared here represent the authors’ opinions and are not official positions. The US dollar is currently stuck in a trading range between 7.1770 and 7.1970, showing resistance to breaking out. Looking at the bigger picture, Quek and Chia suggest a broader range of 7.1620 to 7.2200, indicating a cautious consolidation pattern. This means there is no strong directional movement in the market. Momentum has weakened, resulting in price movements consistent with uncertainty among traders. Many are either rotating positions or hesitant to enter new trades. This creates opportunities for a fade-the-extremes strategy—selling near the upper limit and buying near the lower limit.

Market Patience

From our perspective, it’s better to fade quick movements towards 7.22 or 7.16 rather than expect a breakout to hold, especially with low short-term volatility. Trades made too close to the middle of the range can lose value quickly. Instead of chasing prices, wait for clearer risk-reward setups. For those monitoring the market closely, we’ve observed that the 24-hour range has narrowed even further than anticipated. This narrowing reflects the lack of strong movement in either direction, confirming that strong directional setups are not yet validated. In such situations, the decay of option premiums must be considered. In quieter markets, implied volatility often drops. This makes it worthwhile to explore opportunities where time decay (theta) works in your favor. Range-bound currencies tend to punish those who act too quickly. Patience is key. Traders often seek signs that these established limits will break, typically through market catalysts or shifts in trends. However, recent order flow and positioning do not suggest that a breakout is imminent. In fact, being cautious has proven to be a smart strategy over the past week. We know that the broader mean remains stable. We’re not seeing huge breakouts; instead, the market is circling a central point, with repetitive turns and low energy. During this time, the risk isn’t missing a rally, but rather overcommitting in anticipation of one. Disciplining yourself to protect against market noise is more valuable than trying to predict a breakout that may not happen. When prices remain stable for a long time, it’s often best to wait for clearer signals before adjusting. That said, market ranges don’t last forever, and when they do break, it can happen quickly. Yet, there is currently no pressure indicating that the established thresholds are at risk. For now, measured responses make more sense than aggressive actions. Create your live VT Markets account and start trading now.

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