USD/CNH: Next level of note comes at 7.1100 – UOB
|Further decline in USD/CNH now faces a solid support around 7.1100, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: Yesterday, USD fell sharply, but briefly to 7.1143. There is no increase in momentum as USD rebounded strongly and rapidly from the low. Today, USD is likely to trade sideways, probably in a range of 7.1250/7.1550.
Next 1-3 weeks: We turned negative in USD about two weeks ago. In our most recent update from a week ago (23 Nov, spot at 7.1580), we indicated that “while downward pressure has eased somewhat, only a breach of 7.2050 (no change in ‘strong resistance’ level) would indicate that 7.1100 is out of reach this time around.” USD did not breach 7.2050. Yesterday, it dropped to a low of 7.1143 before rebounding. The price action suggests the USD weakness is intact, and the level to monitor is still at 7.1100. On the upside, the ‘strong resistance’ level has moved lower to 7.1660.
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