USD/CNH: Next support emerges at 7.1100 – UOB
A breach of 7.1100 could prompt USD/CNH to accelerate its losses to the 7.0600 region in the near term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: We expected USD to trade in a sideways range of 7.1280/7.1585 last Friday. USD then rose to 7.1555, dropped to 7.1242, and then closed at 7.1290 (-0.24%). There is a slight increase in downward momentum. Today, as long as USD stays below 7.1500 (minor resistance is at 7.1380), it is likely to edge lower. As downward momentum is not strong for now, the chance of USD breaking the major support at 7.1100 is not high.
Next 1-3 weeks: We have held a negative USD view since the middle of last month. In our most recent narrative from last Thursday (30 Nov, spot at 7.1335), we indicated that the “USD weakness from two weeks ago is intact, and the level to monitor is still at 7.1100.” While we continue to expect USD to weaken, short-term downward momentum has increased somewhat. From here, if USD breaks below 7.1100, the next level to watch is 7.0600. Overall, only a breach of 7.1660 (no change in ‘strong resistance’ level) would mean that the USD weakness has stabilised.
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.
