Downward momentum has largely faded; US Dollar (USD) is likely to trade in a 7.1850/7.2450 range for now against Chinese Yuan (CNH), UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum has largely faded
24-HOUR VIEW: “When USD at 7.2160 in the early Asian session yesterday, we noted that ‘there has been a tentative buildup in upward momentum.’ We expected USD to ‘to edge higher’, but we indicated that ‘as momentum is not strong, any advance is unlikely to reach the major resistance
at 7.2330.’ We also indicated that ‘there is another resistance level at 7.2250.’ Our view was not wrong, as after rising to 7.2260, USD eased off to end the day largely unchanged at 7.2146 (+0.01%). Upward momentum has faded. Today, we expect range trading, likely between 7.2050 and 7.2250.”
1-3 WEEKS VIEW: “After holding a negative USD view since early this month, we revised our view to neutral yesterday (20 May, spot at 7.2160). We indicated that ‘downward momentum has largely faded, and instead of weakening, USD is likely to trade in a 7.1850/7.2450 range for now.’ There
is no change in our view.”