USD/CNH: Bulls may push towards 7.1700 – UOB Group
|Instead of continuing to weaken, the US Dollar (USD) is likely to trade in a 7.1100/7.1700 range. Further USD weakness is not ruled out, but the low near 7.0635 is solid support now, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
May try to test 7.1700 in mid term
24-HOUR VIEW: “While we expected USD to weaken yesterday, we indicated that ‘the support at 7.1300 is unlikely to come under threat.’ We obviously did not anticipate the wild price action, as USD plunged to 7.0636 and then snapped back to close at 7.1350 (-0.48%). The rebound in severely oversold conditions suggests instead of continuing to decline, USD is likely to trade in a 7.1100/7.1700 range today.”
1-3 WEEKS VIEW: “We have held a negative USD stance since late last month. Yesterday (05 Aug, spot at 7.1490), we indicated that ‘the recent price action continues to suggest further USD weakness, even though it is too early to determine if the long-term support near 7.0980 is within reach.’ USD subsequently not only broke below 7.0980, but also fell further to a low of 7.0636. While downward momentum has slowed somewhat with the strong rebound from the low, only a breach of 7.2000 (no change in ‘strong resistance’ level) would mean that the weakness has stabilised. Until then, further USD weakness is not ruled out, but the low near 7.0635 is solid support now.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.