USD/CNH: Set to weaken to 7.2430 before stabilisation can be expected – UOB Group

Scope for US Dollar (USD) to weaken to 7.2430 before stabilisation can be expected vs Chinese Yuan (CNH); it is unclear if 7.2150 will come into view. In the longer run, outlook is unclear after sharp and short-lived swings; for the time being, USD could trade between 7.2000 and 7.3000, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD has a chance to trade between 7.2000 and 7.3000

24-HOUR VIEW: "While we expected 'further USD strength' yesterday, we highlighted that 'the rally appears to be excessive, and any advance is likely part of a higher range of 7.2900/7.3500.' USD then rose to 7.3485 before staging a sharp drop to 7.2746. It continues to decline in early Asian trade today. While deeply oversold, there is scope for USD to weaken to 7.2430 before stabilisation can be expected. Currently, it is unclear if there is enough momentum for USD to reach the major support at 7.2150. On the upside, resistance levels are at 7.2750 and 7.3000."

1-3 WEEKS VIEW: "We indicated yesterday, 03 Apr, when USD was at 7.3100 that 'the recent surge in momentum 'suggests the outlook for USD remains positive' and 'the levels to monitor are 7.3500 and 7.3800.' USD subsequently rose to 7.3485 and then plummeted. The outlook is unclear after the sharp and short-lived swings. For the time being, USD could trade between 7.2000 and 7.3000."