USD/CNH: Increasing risks to extra losses – UOB

Pablo Piovano FXStreet

Further downside in USD/CNH should not be ruled out in the near term, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: We expected USD to trade sideways in a range of 7.2460/7.2860 yesterday. USD then traded in a narrower range than expected (7.2550/7.2779). We continue to expect USD to trade sideways, even though the slightly firmer underlying tone suggests a higher range of 7.2650/7.2930.

Next 1-3 weeks: Our update from yesterday (04 Sep, spot at 7.2670) still stands. As highlighted, there is a slight increase in downside risk. However, USD must break and stay below 7.2390 before a sustained decline is likely. The chance of USD breaking clearly below 7.2390 will remain intact as long as USD stays below 7.3000 in the next few days.

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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