USD/CNH: Likely to consolidate within a range of 7.0680/7.0880 – UOB Group
US Dollar (USD) is likely to consolidate within a range of 7.0680/7.0880. In the longer run, downward momentum remains strong; if USD breaks below 7.0600, the next level to watch is 7.0400, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Next level to watch for USD/CNH is 7.0400
24-HOUR VIEW: "Yesterday, when USD was at 7.0680 in the early Asian trade, we highlighted the following: 'Strong downward momentum is likely to continue to outweigh oversold conditions. Today, USD could break below 7.0600, but it remains to be seen if it can maintain a foothold below this level. The next support at 7.0400 is unlikely to come into view today. On the upside, resistance levels are at 7.0750 and 7.0830'. Our view was incorrect, as after dropping to a low of 7.0663, USD rebounded to 7.0816 before pulling back to close at 7.0763 (+0.10%). The current price movements are likely part of a consolidation, and today, we expect USD to trade within a range of 7.0680/7.0880."
1-3 WEEKS VIEW: "We turned negative on USD early this week. Tracking the subsequent decline, we indicated yesterday (27 Nov, spot at 7.0680) that 'downward momentum remains strong and if USD breaks below 7.0600, the next level to watch is 7.0400'. Although downward momentum has slowed somewhat with the subsequent rebound, we will continue to hold the same view as long 7.0930 (no change in ‘strong resistance’ level) is not breached."
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