USD/CNH: Bears strive to test 7.2220 – UOB Group

The next support at 7.2220 is unlikely to come under threat. The US Dollar (USD) must break and remain below the 7.2037 low before further weakness can be expected, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

The price is to touch 7.2220 in short term

24-HOUR VIEW: “The sharp drop in USD that sent it plummeting to 7.2354 was surprising. While the weakness is oversold, it has not stabilised. Today, as long as 7.2600 (minor resistance is at 7.2540) is not breached, USD could drop below 7.2350. The next support at 7.2200 is unlikely to come under threat.”

1-3 WEEKS VIEW: “Last Thursday, USD plunged to a low of 7.2037 before rebounding. On Friday (26 Jul, spot at 7.2470), we highlighted that ‘while further USD weakness is not ruled out, it must break and remain below the 7.2037 low before further decline can be expected.’ We added, ‘the likelihood of USD breaking clearly below the low will be intact provided that 7.2800 is not breached.’ We continue to hold the same view.”