US Dollar (USD) is expected to continue to rise against Chinese Yuan (CNH); the major resistance at 7.1910 could be out of reach for now. In the longer run, upward momentum is building, but for a continued advance, USD must first close above 7.1910, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is building
24-HOUR VIEW: “Our expectation for USD to ‘trade in a range of 7.1530/7.1730’ yesterday turned out to be incorrect. Instead of trading in a range, USD rose and reached a high of 7.1830, closing on a firm note at 7.1815 (+0.18%). While we expect USD to continue to rise, overbought conditions indicate that the major resistance at 7.1910 could be out of reach for now. Support levels are at 7.1750 and 7.1700.”
1-3 WEEKS VIEW: “After holding a negative USD view for a few days, we noted yesterday (28 Jul, spot at 7.1650) that ‘downward momentum is waning rapidly, and a clear break above 7.1730 (‘strong resistance’ level) would mean that 7.1295 is not coming into view.’ That said, we did not expect USD to rise to a high of 7.1830. Downward momentum has waned. Upward momentum is building, but for a continued advance, USD must first close above 7.1910. The likelihood of USD closing above 7.1910 will increase in the coming days as long as it holds above 7.1660.”
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