USD/CNH: Likely to trade between 7.1750 and 7.1950 – UOB Group
US Dollar (USD) is likely to trade between 7.1750 and 7.1950 against Chinese Yuan (CNH). In the longer run, downward momentum is slowing; a breach of 7.2070 would mean that the downward bias has faded, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum is slowing
24-HOUR VIEW: "After USD dropped to 7.1626 two days ago and then rebounded, we indicated yesterday that 'downward pressure appears to have eased, and USD is likely to trade sideways today, probably between 7.1640 and 7.1840.' We did not expect USD to rebound to 7.1935. The rebound lacks momentum, and instead of extending further, USD is likely to trade between 7.1750 and 7.1950."
1-3 WEEKS VIEW: "On Monday (26 May, spot at 7.1770), we indicated that 'while downward momentum has not increased significantly, as long as 7.2070 (‘strong resistance’ level) is not breached, the bias for USD is on the downside toward 7.1500.' USD subsequently dropped to 7.1626 and then rebounded. Yesterday, it rebounded further to 7.1935. While downward momentum is beginning to slow, only a breach of 7.2070 (no change in ‘strong resistance’ level) would mean that the downward bias has faded."
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