USD/CNH faces some near-term consolidation – UOB

Pablo Piovano FXStreet

There is the possibility of some consolidation in USD/CNH before a probable resumption of the upside pressure, argue Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: We expected USD to trade in a range of 7.2920/7.3300 yesterday. We did not anticipate the spike in volatility as USD rose to 7.3360, plummeted to 7.2780 before closing at 7.2893 (-0.24%). The rapid drop from the high appears to be overdone, and USD is unlikely to weaken much further. Today, USD is more likely to trade sideways in a range of 7.2700/7.3200.

Next 1-3 weeks: Our view from yesterday (21 Aug, spot at 7.3100) still stands. As highlighted, USD could consolidate for a few days before breaking above last week’s high of 7.3490. However, if USD breaks below 7.2500 (‘strong support’ level), it would suggest that USD is not advancing further.

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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