USD/CNH: Chance to retest the 7.3700 level – UOB Group
|US Dollar (USD) is expected to trade in a range between 7.3430 and 7.3615. 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.
A break above 7.3700 is unlikely for now
24-HOUR VIEW: “Although USD traded in a subdued manner on Tuesday, we pointed out yesterday (Wednesday) that ‘despite the quiet price action, upward momentum appears to be building, albeit tentatively.’ We held the view that USD ‘could edge higher to 7.3550 before levelling off.’ We indicated that ‘the major resistance at 7.3700 is not expected to come into view.’ In line with our expectations, USD rose, reaching a high of 7.3615. USD closed higher by 0.15% at 7.3522. There has been no further increase in upward momentum. Today, we expect USD to trade in range, likely between 7.3430 and 7.3615.”
1-3 WEEKS VIEW: “Our latest narrative was from two days ago (07 Jan, spot at 7.3465), wherein ‘as long as 7.3050 is not breached, there is room for USD to retest the 7.3700 level.’ We indicated that ‘at this time, it is too early to determine if USD can break and remain above this level.’ There is no change in our view, but the ‘strong support’ level at 7.3050 has moved higher to 7.3250.”
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