USD/CNH: Likely to trade in a range between 7.1160 and 7.133 – UOB Group
US Dollar (USD) is likely to trade in a range between 7.1160 and 7.1330. In the longer run, downward bias is building, but USD must first close below 7.1100 before a sustained decline can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Below 7.1100, a sustained decline can be expected
24-HOUR VIEW: "While we expected USD to 'trade with a downward bias yesterday,' we pointed out that 'any decline is unlikely to break below 7.1100.' USD subsequently dropped to a low of 7.1134. USD rebounded from the low to close unchanged at 7.1232. The downward bias has faded with the rebound. Today, we expect USD to trade in a range, likely between 7.1160 and 7.1330."
1-3 WEEKS VIEW: "Two days ago (08 Sep, spot at 7.1285), we highlighted that 'while the downward bias is building, USD must first close below 7.1100 before a sustained decline can be expected.' Yesterday, USD fell to a low of 7.1134 and then rebounded. While there has been no further increase in downward pressure, we will maintain our view for now. Overall, only a breach of 7.1400 (no change in ‘strong resistance’ level) would indicate that the downward bias has eased."
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