USD/CNH is now seen within 7.3050-7.3470 range – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang argue that USD/CNH is now expected to navigate between 7.3050 and 7.3470 in the short term.

Key Quotes

24-hour view: We expected USD to trade in a range between 7.3020 and 7.3240 yesterday. However, after dipping to a low of 7.3074, USD rose strongly to a high of 7.3308. The rapid rise has scope to advance there does not appear to have enough momentum for USD to reach 7.3470 today (there is another resistance at 7.3350). Support is at 7.3220, followed by 7.3150. 

Next 1-3 weeks: Two days ago (24 Oct, spot at 7.3080), we indicated that “downward momentum is building, but USD has to break clearly below 7.2850 before a sustained decline is likely.” We added, “the chance of USD breaking clearly below 7.2850 will remain intact as long as it stays below 7.3260 in the next few days.” Yesterday, USD rose above 7.3250 (high has been 7.3308). The momentum buildup has faded. USD is likely to trade in a range for the time being, likely between 7.3050 and 7.3470.