USD/CNH: Any decline is unlikely to reach the major support at 7.2430 – UOB Group
|Scope for US Dollar (USD) to continue to weaken vs Chinese Yuan (CNH); any decline is unlikely to reach the major support at 7.2430. In the longer run, sharp but short-lived price action has resulted in a mixed outlook; USD is likely to trade between 7.2430 and 7.3700 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD is likely to trade between 7.2430 and 7.3700 for now
24-HOUR VIEW: "Yesterday, we expected USD to 'trade in a range of 7.3300/7.3900.' Instead of trading in a range, USD plummeted to 7.3000. While there is scope for USD to continue to weaken, oversold conditions suggest any decline is unlikely to reach the major support at 7.2430 (there is another support at 7.2700). On the upside, 7.3400 is a strong resistance level (minor resistance is at 7.3250)."
1-3 WEEKS VIEW: "After the sharp rally in USD to 7.4288, we indicated two days ago (09 Apr, spot at 7.4100) that the 'surge in momentum indicates that USD is likely to continue to rise, and the level to monitor is 7.4500.' Our view was invalidated quickly as USD plunged and broke below our ‘strong support’ level of 7.3100 yesterday. The sharp but short-lived price action has resulted in a mixed outlook. For the time being, USD is likely to trade between 7.2430 and 7.3700."
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