The US Dollar (USD) is likely to trade in a range, probably between 7.2350 and 7.2700. In the longer run, the level to monitor now is 7.2800; the next resistance above 7.2800 is at 7.3115, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
The level to monitor for USD/CNH is 7.2800
24-HOUR VIEW: “USD traded in a range on Wednesday and then closed largely unchanged. Yesterday (Thursday), we pointed out that ‘Despite trading in a range, there has been a slight increase in momentum.’ We expected USD to edge higher, but we noted that ‘as momentum is not strong, any advance is unlikely to break above 7.2600.’ Our view of a higher USD was correct, even though the advance surpassed 7.2600 (high has been 7.2700). Given the severely overbought conditions, USD is unlikely to advance further. Today, USD is more likely to trade in a range, probably between 7.2350 and 7.2700.”
1-3 WEEKS VIEW: “We have held a positive USD view since late last week. As we tracked the advance, we indicated two days ago (13 Nov, spot at 7.22470) that ‘The level to monitor is 7.2800 and the next resistance above 7.2800 is at 7.3115.’ Yesterday, USD rose to a high of 7.2700. There is no change in our view. Overall, only a breach of 7.2000 (no change in ‘strong resistance’ level) would mean that the upward pressure has faded.”
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