USD/CNH: Sudden surge suggests further USD strength to 7.1600 – UOB Group
USD strength is likely to continue; the levels to monitor are 7.1480 and 7.1600. In the longer run, strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Levels to monitor are 7.1480 and 7.1600
24-HOUR VIEW: “When USD was trading at 7.0930 yesterday, we indicated that ‘while USD is likely to rise today, the major resistance at 7.1200 is still unlikely to come under threat.’ We did not anticipate USD to rally sharply, as it soared to a high of 7.1430. USD closed on a strong note at 7.1363 (+0.59%). Today, we continue to expect USD strength, even though overbought conditions suggest the upside potential could be limited, and advance is likely to be at a more gradual pace. The levels to monitor are 7.1480 and 7.1600. On the downside, any pullback is likely to remain above 7.1100 with minor support at 7.1200.”
1-3 WEEKS VIEW: “Our latest narrative was from last Wednesday (09 Oct, spot at 7.0750), wherein ‘the current price movements are likely part of a range trading phase’ and ‘for the time being, USD is expected to trade between 7.0300 and 7.1200.’ After USD rose to 7.1000 two days ago, we highlighted that ‘there has been an increase in momentum, but not enough to suggest the start of a sustained advance.’ We added, ‘USD must break and remain above 7.1200 before a sustained advance is likely.’ We did not expect the sudden and strong surge that sent USD to a high of 7.1430. The price action indicates further USD strength to 7.1600, potentially 7.1900. To keep the momentum going, USD must not break below the ‘strong support’ level, now at 7.0900.”
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FXStreet Insights Team
FXStreet
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