USD/CNH: A break below 7.2800 might weigh the USD – UOB Group

Barring a break below 7.2920, the US Dollar (USD) could rise and test the major resistance level at 7.3100. USD could break above 7.3100, but it is too early to tell if the next significant resistance at 7.3400 will come into view, UOB Group analysts suggest.

USD is unlikely to break above 7.3100

24-HOUR VIEW: “On Wednesday, USD soared to 7.3080 before pulling back. Yesterday (Thursday), we indicated that ‘the pullback from the high in overbought conditions suggests that instead of continuing to rise, USD is more likely to trade in a range, probably between 7.2920 and 7.3060.’ USD subsequently traded in a narrower range than expected (7.2941/7.3040). Despite the quiet price movements, the underlying tone has improved to some extent. Today, barring a break below 7.2920 (minor support is at 7.2970), USD could rise and test the major resistance at 7.3100. From here, there does not appear to be sufficient momentum for USD to break clearly above this level.”

1-3 WEEKS VIEW: “There have been no significant changes since our update yesterday (27 Jun, spot at 7.2990). As indicated, after the strong advance in USD two days earlier, there is there is still room for USD to rise further. However, while USD could break above 7.3100, it is too early to tell if the next significant resistance at 7.3400 will come into view. Overall, only a breach of 7.2800 (no ‘strong support’ level) would mean that the advance in USD from last has ended.”