US Dollar (USD) is likely to trade in a range of 7.1530/7.1730 against Chinese Yuan (CNH). In the longer run, downward momentum is waning rapidly; a clear break above 7.1730 would indicate that 7.1295 is not coming into view, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum is waning rapidly
24-HOUR VIEW: “We expected USD to ‘trade in a range between 7.1440 and 7.1630’ last Friday. We were incorrect, as USD rose to a high of 7.1706 and then closed at 7.1686 (+0.19%). Despite advancing, USD has not gained much momentum. Today, we continue to expect range trading, albeit in a higher range of 7.1530/7.1730.”
1-3 WEEKS VIEW: “In our latest narrative from last Thursday (24 Jul, spot at 7.1500), we indicated that USD ‘could drop to 7.1295.’ USD then dropped to 7.1435 before rebounding. On Friday, it reached a high of 7.1706. Downward momentum is waning rapidly, and a clear break above 7.1730 (no change in ‘strong resistance’ level) would mean that 7.1295 is not coming into view.”
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