USD/CNH: Current price movements are likely part of range trading – UOB Group
US Dollar (USD) is expected to trade in a 7.2550/7.2800 range. In the longer run, current price movements are likely part of range trading, probably between 7.2400 and 7.2900, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
USD to probably trade between 7.2400 and 7.2900
24-HOUR VIEW: “Following USD sharp pullback two days ago, we noted yesterday that ‘the decline appears to be running ahead of itself, and USD is unlikely to weaken much further.’ We expected USD to ‘trade in a 7.2630/7.2930 range.’ USD subsequently traded in a narrower range than expected (7.2631/7.2859). There has been no increase in either downward or upward momentum, and we continue to expect range trading, most likely between 7.2550 and 7.2800.”
1-3 WEEKS VIEW: “We turned positive in USD on Tuesday (03 Dec, spot at 7.2880), indicating the ‘rapid increase in momentum could lead to USD rising to 7.3115.’ After USD rose to 7.3145 and then pulled back sharply, we indicated yesterday (Thursday) that ‘upward momentum has slowed with the sharp pullback.’ We added, ‘if USD breaks below 7.2630 (no change in ‘strong support’ level), it would mean that it is not rising further.’ USD eased to a low of 7.2631 in NY trading. While our ‘strong support’ level has not been clearly breached yet, upward momentum has largely faded. The current price movements are likely part of range trading, probably between 7.2400 and 7.2900.”
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