USD/CNH: A deeper pullback remains in the pipeline – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group suggested USD/CNH could drop further on a breach of 7.0850.

Key Quotes

24-hour view: “USD traded between 7.1034 and 7.1337 yesterday, wider than our expected range of 7.1100/1.1350. The underlying tone has weakened somewhat and but for now, any weakness is viewed as a lower trading range of 7.1000/7.1300 (a sustained decline below 7.1000 is not expected).”

Next 1-3 weeks: “The pace and extent of the pull-back from last week’s 7.1966 high came as a surprise. For now, we continue to hold the view that USD is “trading sideways” but if USD closes below 7.0850, it could signal the start of a deeper decline in USD. At this stage, the prospect for such a move is not that high but it would increase unless USD can move above 7.1500 within these few days.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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