USD/CNH: Room for USD to retest the 7.3700 level – UOB Group
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Slight increase in upward momentum is likely to lead to US Dollar (USD) trading in a higher range of 7.3450/7.3650. 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.
USD unlikely to break and remain above 7.3700
24-HOUR VIEW: “Our expectation for USD to ‘trade in a range between 7.3430 and 7.3615’ yesterday was wrong, even though it traded in a narrower range than expected (7.3439/7.3587). USD closed largely unchanged at 7.3561 (+0.05%). Despite the relatively quiet price action, there has been a slight increase in upward momentum. However, this is likely to lead to a higher trading range of 7.3450/7.3650 instead of a sustained rise.”
1-3 WEEKS VIEW: “Our latest narrative was from three 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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