USD/CNH: Major resistance at 7.3700 is not expected to come into view – UOB Group

US Dollar (USD) could edge higher to 7.3550 before levelling off; the major resistance at 7.3700 is not expected to come into view. In the longer run, room for USD to retest the 7.3700 level; it is too early to determine if it can break and remain above this level, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Some room for USD/CNH to retest the 7.3700 level

24-HOUR VIEW: “We noted yesterday (Tuesday) that the price action from Monday ‘did not result in an increase in either downward or upward momentum.’ We expected USD to ‘trade in a sideways range of 7.3210/7.3610.’ USD then traded in a narrower range than expected (7.3310/7.3500), closing largely unchanged at 7.3415 (-0.05%). Despite the quiet price action, upward momentum appears to be building, albeit tentatively. Today, USD could edge higher to 7.3550 before levelling off. The major resistance at 7.3700 is not expected to come into view. Support levels are at 7.3350 and 7.3250.”

1-3 WEEKS VIEW: “Yesterday (07 Jan, spot at 7.3465), we pointed out that ‘as long as 7.3050 is not breached, there is room for USD to retest the 7.3700 level.’ We added, ‘at this time, it is too early to determine if USD can break and remain above this level.’ USD then traded in a subdued manner, and we continue to hold the same view for now.”