USD/CNH: To trade between 7.1300 and 7.1550 – UOB Group
The US Dollar (USD) is expected to trade in a range between 7.1300 and 7.1550. In the longer run, upward momentum is building, but USD must break and remain above 7.1600 before further sustained gains are likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
USD must break and remain above 7.1600 for further gains
24-HOUR VIEW: “We expected USD to rise yesterday, but we were of the view that ‘the 7.1600 level is likely out of reach.’ While USD rose more than expected to 7.1650, it pulled back quickly to close largely unchanged (7.1420, -0.06%). The brief rise did not result in any increase in momentum. Today, we expect USD to trade in range, likely between 7.1300 and 7.1550.”
1-3 WEEKS VIEW: “Two days ago (28 Oct, spot at 7.1460), we highlighted that ‘While upward momentum is building, USD must break and remain above 7.1600 before further sustained gains are likely.’ We added, ‘The likelihood of USD breaking clearly above 7.1600 will remain intact, provided that 7.1200 is not breached in the next few days.’ Yesterday, USD rose to 7.1650 before pulling back quickly. There is no increase in momentum, and we continue to hold the same view for now.”
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