USD/CNH remains focused on 7.1100 – UOB

The resumption of the selling pressure in USD/CNH should face a key obstacle at 7.1100 for the time being, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: We expected USD to trade in a sideways range of 7.1250/7.1550 yesterday. Our view of sideways trading was not wrong, even though USD traded in a wider range of 7.1232/7.1569 before ending the day little changed at 7.1459 (+0.04%). The price action offers no fresh clues, and we continue to expect USD to trade sideways, likely between 7.1280 and 7.1585.

Next 1-3 weeks: Our update from yesterday (30 Nov, spot at 7.1335) still stands. As highlighted, the USD weakness from two weeks ago is intact, and the level to monitor is still at 7.1100. However, if USD breaches 7.1660 (no change in ‘strong resistance’ level from yesterday), it would mean that the USD weakness has stabilised.