USD/CNH: A break above 7.1330 is not ruled out – UOB Group
A break above the major resistance at 7.1330 is not ruled out; a sustained rise above this level seems unlikely for now. In the longer run, there has been an increase in momentum, but the US Dollar (USD) has to break and remain above 7.1350 before a sustained rise is likely, UOB Group FX strategists Quek Ser Leang and Peter Chia note.
Bulls are set to push towards 7.1330
24-HOUR VIEW: “While we expected USD to edge higher yesterday, we were of the view that ‘any advance is part of a higher trading range of 7.0850/7.1150.’ However, USD rose more than expected to 7.1250, closing on a firm note at 7.1220 (+0.35%). The increase in momentum is likely to lead to further USD strength. A break above the major resistance at 7.1330 is not ruled out, but a sustained rise above this level seems unlikely for now. Support levels are at 7.1140 and 7.1000.”
1-3 WEEKS VIEW: “Yesterday, when USD was at 7.1020, we indicated that ‘the current price movements are likely part of a sideways trading phase.’ We expect USD ‘to trade between 7.0650 and 7.1350 for the time being.’ USD then rose to 7.1250. There has been an increase in momentum, but not sufficiently enough to suggest the start of a sustained advance. USD has to break and remain above 7.1350 before a sustained rise is likely. The likelihood of USD breaking clearly above 7.1350 is high for now, but it will improve as long as 7.0800 is not taken out. Looking ahead, the next resistance above 7.1350 is at 7.1700.”
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