USD/CNH: Any further decline is unlikely to break below 7.1600 – UOB Group

FXStreet Insights Team FXStreet

US Dollar (USD) could continue to weaken against Chinese Yuan (CNH); any further decline is unlikely to break below 7.1600. In the longer run, mild downward pressure could lead to USD edging lower; it remains to be seen if it can reach 7.1400, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward pressure can lead to USD edging lower

24-HOUR VIEW: "Yesterday, we held the view that USD 'is likely to trade between 7.1800 and 7.2050.' We did not expect USD to drop to 7.1701. USD could continue to weaken today, but given the oversold conditions, any further decline is unlikely to break below 7.1600. On the upside, a break of 7.1900 (minor resistance is at 7.1810) would suggest the weakness has stabilised."

1-3 WEEKS VIEW: "In our latest narrative from last Thursday (29 May, spot at 7.2025), we highlighted that USD “is likely to trade in a range between 7.1800 and 7.2300 for now.” After trading within the range for several days, USD fell and broke below 7.1800 yesterday, reaching a low of 7.1701. Despite the decline, there has only been a slight increase in downward momentum. From here, we expect USD to edge lower, but it remains to be seen if there is sufficient momentum for it to reach 7.1400. On the upside, should USD break above 7.1960, it would indicate that the current mild downward pressure has faded."

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FXStreet Insights Team

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