United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that the USD/CNH pair is currently consolidating in a tight range around 6.77. In the 1-3 week horizon, they maintain a deviation towards 6.7600 as long as the sturdy resistance at 6.7820 remains intact. In the next 1-3 months, they see initial growth potential if key technical resistance is broken.
Short-term consolidation, medium-term downward trend
“24-HOUR VIEW: After the USD fell in line with our expectations on Wednesday, we highlighted the following yesterday: “Our forecast was not wrong as the USD then rose to 6.7781 and then fell to a low of 6.7653. Downward momentum continues to raise and today there is a chance that USD will test 6.7600. To maintain momentum, USD must stay below 6.7780 (minor resistance is at 6.7720) Our expectations did not come true as the USD traded calmly in the range of 6.7649-6.7753, closing at 6.7734 (+0.07%).
“1-3 WEEK REVIEW: Two days ago (July 15, spot at 6.7720) we highlighted that “downward momentum is increasing and USD will likely trade with a downward trend towards 6.7600.” We will maintain the same view as long as the 6.7820 level (no change in ‘sturdy resistance’ level) is not breached.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor. Find out more.)
