USD/CNH: Slowly trading towards the resistance at 7.2750 – UOB Group
|The US Dollar (USD) is expected to trade in a 7.2500/7.2750 range. USD must break and remain below the 7.2037 low before further weakness can be expected, UOB Group FX analysts Quek Ser Leang and Peter Chia note.
Bulls are set to test 7.2750
24-HOUR VIEW: “After USD briefly plunged to 7.2037 last Thursday and then rebounded strongly, we indicated on Friday that ‘the rebound in oversold conditions suggest USD is unlikely to weaken further.’ We expected USD to trade in a 7.2300/7.2650 range. USD subsequently traded between 7.2340 and 7.2661, closing on a relatively firm note at 7.2631 (+0.31%). Today, we continue to expect USD to trade in a range. However, the slightly firmed underlying tone suggests a higher range of 7.2500/7.2750.”
1-3 WEEKS VIEW: “Last Thursday, USD plunged to a low of 7.2037 before rebounding. On Friday (26 Jul, spot at 7.2470), we highlighted that ‘while further USD weakness is not ruled out, it must break and remain below the 7.2037 low before further decline can be expected.’ We added, ‘the likelihood of USD breaking clearly below the low will be intact provided that 7.2800 is not breached.’ We continue to hold the same view.”
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