USD/CNH: Expected to trade in a sideways range of 7.1970/7.2190 – UOB Group
|US Dollar (USD) is expected to trade in a sideways range of 7.1970/7.2190. In the longer run, a breach of 7.2330 would indicate that the likelihood of USD declining to 7.1700 has faded, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Above 7.2330, the likelihood of declining to 7.1700 to fade
24-HOUR VIEW: "We indicated yesterday that “While further sideways trading still seems likely, the firmer underlying tone suggests a higher range of 7.1950/7.2200.” USD traded sideways as expected, albeit in a narrower range of 7.2031/7.2154. The quiet price action provides no fresh clues, and we continue to expect USD to trade sideways. Expected range for today: 7.1970/7.2190. 1-3 WEEKS VIEW: "We have held a negative USD view since early last week. In our most recent narrative from Tuesday (13 May, spot at 7.2000), we noted that 'the renewed downward momentum suggests 7.1700 could be back in sight.' Since then, USD has not been able to make significant headway on the downside. However, only a breach of 7.2330 (no change in ‘strong resistance’ level) would indicate that the likelihood of USD declining to 7.1700 has faded."
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