USD/CNH: Chance of dipping below 7.1600 – UOB Group

Soft underlying tone suggests US Dollar (USD) could dip below 7.1600 against Chinese Yuan (CNH); the major support at 7.1450 is likely out of reach for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Major support at 7.1450 is likely out of reach

24-HOUR VIEW: "On Tuesday, we expected USD to edge lower. After USD edged lower, we stated yesterday (Wednesday) that 'although there has been no significant increase in downward momentum, we continue to see room for USD to edge lower, but given the current momentum, any decline is unlikely to reach 7.1450.' We noted that 'resistance levels are at 7.1750 and 7.1800.' However, instead of edging lower, USD traded in a range of 7.1618/7.1795, closing slightly higher by 0.10% at 7.1713. The underlying tone still appears soft, and today, there is a chance for USD to dip below 7.1600. Given the current momentum, any further decline is unlikely to reach the major support at 7.1450. On the upside, resistance levels are at 7.1720 and 7.1785."

1-3 WEEKS VIEW: "There has been a tentative buildup in momentum; USD is likely to edge lower toward 7.1450. After expecting USD to trade in a range for about two weeks, we revised our view to slightly negative yesterday (25 Jun, spot at 7.1680). We highlighted that “there has been a tentative buildup in momentum.” We indicated that “provided that the ‘strong resistance’ level, currently at 7.1950, is not breached, USD is likely to edge lower toward 7.1450.” Our view remains unchanged."