FX Strategists at UOB Group expect the upside pressure in USD/CNH to lose momentum on a breach of 7.0350.
24-hour view: “Not surprisingly, USD posted an ‘inside day‘ yesterday as it traded within Wednesday’s broad range. The underlying tone has weakened somewhat and from here; USD could drift lower to 7.0550. Resistance is at 7.1200.”
Next 1-3 weeks: “After surging to a high of 7.1652 last Thursday (19 Mar), USD has not been able to make much headway on the upside. The relatively sharp decline of -0.48% yesterday (24 Mar) has dented the upward momentum and the chance for USD to break the strong 7.1700 level has diminished. From here, unless USD moves and stays above 7.1200 within these 1 to 2 days, a break of 7.0350 (‘strong support’ level previously at 7.0180) would indicate that the recent upward pressure has dissipated.”
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