USD/CNH: Consolidation ahead of extra gains? – UOB

Pablo Piovano FXStreet

USD/CNH could face some consolidative period ahead of the resumption of the uptrend according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: Last Friday, USD dipped briefly to 7.2828 then rebounded to end the day largely unchanged (7.3068, +0.09%). The price movements appear to be consolidative. Today, we expect USD to trade in a range, likely between 7.2920 and 7.3300.

Next 1-3 weeks: Last Thursday (17 Aug), USD surged to a high of 7.3490 before pulling back. The pullback in overbought conditions suggests USD could consolidate for a few days. Overall, as long as 7.2500 (‘strong support’ level) is not breached, there is scope for USD to break above 7.3490 at a later stage. In view of the overbought conditions, the major and long-term resistance near 7.3745 (last year’s peak) is likely out of reach.

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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