USD/CNH: Likely to trade between 7.2200 and 7.2800 – UOB Group

Despite no significant increase in downward momentum, there is room for the US Dollar (USD) to edge lower to 7.2380. In the longer run, momentum has largely faded; USD is likely to trade between 7.2200 and 7.2800 for the time being, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD to edge lower to 7.2380

24-HOUR VIEW: “Two days ago, USD rose to 7.2730, then pulled back. Yesterday, we highlighted that ‘Upward pressure appears to have eased with the pullback.’ We added, ‘instead of continuing to advance, USD is more likely to trade in a sideways range of 7.2450/7.2660.’ USD then rose to 7.2695, dropped to 7.2425 before closing at 7.2479, lower by 0.15%. Despite no significant increase in downward momentum, there is room for USD to edge lower to 7.2380 before a rebound is likely. The major support at 7.2200 is unlikely to be tested. Resistance is at 7.2590, followed by 7.2660.”

1-3 WEEKS VIEW: “Two days ago (26 Nov, spot at 7.2630), we noted that ‘momentum is building again.’ We added, ‘USD could break above 7.2800, but it is too early to determine if 7.3115 is within reach.’ Since then, USD has not been able to make much headway on the upside. The buildup in momentum has largely faded. The current price action is likely part of a consolidation range, and we expect USD to trade between 7.2200 and 7.2800 for the time being. Looking ahead, USD has to break clearly above 7.2800 before a sustained advance is likely.”