USD/CNH: Mild rebound risk – OCBC
|USD/CNH traded a low of 7.0710 last Friday following the break below 7.10 psychological level, OCBC’s FX analyst Christopher Wong notes.
It’s appreciation time for USD/CNH
“Market chatters of exporters caught long USD, rushing to offload after the pair broke key levels and month-end distortion. Daily momentum is flat while RSI shows signs of turning higher near oversold conditions. Rebound risk is not ruled out but technical levels can be breached if the USD bear trend continues.”
“Ongoing market chatters of USD conversion flows from exporters, funds may see bigger slippage if there is a panic rush and typically the break of downside key level can accelerate this move. Potential unwinding of Trump bets/hedges may also be another driver adding to the sell-off in USD/CNH. Key support at 7.07/7.08. If broken puts next support at 7.03, 7 levels (major support). Resistance at 7.14.”
“We will also pay close attention to USD/CNY daily fix for gauge on how comfortable policymakers are with regards to the pace of RMB appreciation. Today’s fix was set at 7.1027 even though USD/CNH was trading around 7.09. This may imply that policymakers are trying to slow the pace of appreciation this time.”
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.