USD/CNH: Expected to trade in a 7.2630/7.2930 range – UOB Group
US Dollar (USD) is expected to trade in a 7.2630/7.2930 range. In the longer run, upward momentum has slowed with sharp pullback; a breach of 7.2630 would mean that USD is not rising further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Upward momentum has slowed with sharp pullback
24-HOUR VIEW: “On Tuesday, USD soared to a high of 7.3145. Yesterday (Wednesday), we stated that ‘despite being deeply overbought, the advance appears to have enough momentum to retest the 7.3145 level before a more sustained pullback can be expected.’ We added, ‘the next resistance at 7.3300 is not expected to come under threat.’ However, USD pulled back from a high of 7.3060, reaching a low of 7.2673. USD closed at 7.2789 (-0.27%). The decline appears to be running ahead of itself, and USD is unlikely to weaken much further. Today, we expect USD to trade in a 7.2630/7.2930 range.”
1-3 WEEKS VIEW: “We turned positive in USD two days (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ After USD surpassed the 7.3115 level, we highlighted yesterday (04 Dec, spot at 7.2975) that ‘momentum remains strong, and now that USD has broken above 7.3145, the next significant resistance level is at 7.3678, last year’s high.’ We did not expect the subsequent sharp pullback that reached a low of 7.2673. Upward momentum has slowed with the pullback. From here, if USD breaks below 7.2630 (no change in ‘strong support’ level), it would mean that it is not rising further.”
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FXStreet Insights Team
FXStreet
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