USD/CNH: Any decline is likely limited to a test of 7.1500 – UOB Group

US Dollar (USD) is likely to edge lower against Chinese Yuan (CNH), but any decline is likely limited to a test of 7.1500. In the longer run, downward momentum has increased further; if USD breaks below 7.1450, the next level to monitor is 7.1300, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum has increased further

24-HOUR VIEW: "We pointed out yesterday that 'the current price movements are likely part of a range trading phase, probably between 7.1530 and 7.1730.' USD then traded in a tight range of 7.1607/7.1698, closing largely unchanged at 7.1623 (+0.02%). Despite the quiet price action, downward momentum appears to be increasing. Today, we expect USD to edge lower, but given the current mild downward pressure, any decline is likely limited to a test of 7.1500. On the upside, resistance levels are at 7.1655 and 7.1720."

1-3 WEEKS VIEW: "We highlighted two days ago (01 Jul, spot at 7.1570) that 'downward momentum has increased further, and if USD breaks below 7.1450, the next level to monitor is at 7.1300.' Although USD traded in a quiet manner over the past couple of days, we will hold on to our view as long as 7.1790 (no change in ‘strong resistance’ level) remains intact."