The continuation of the upside momentum in USD/CNH might problem the 7.1200 degree within the subsequent weeks, remark UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
24-hour view: “We highlighted yesterday that USD might break above 7.0960 nevertheless it may not be capable to maintain above this degree. USD rose to a excessive of seven.0945 in NY commerce earlier than rising briefly above 7.0960 in early Asian commerce. Situations are deeply overbought and USD is unlikely to advance a lot additional. Right this moment, we anticipate USD to commerce in a variety, doubtless between 7.0700 and seven.1000.”
Subsequent 1-3 weeks: “We turned constructive USD two weeks in the past. As USD rose, in our newest narrative two days in the past (24 Might, spot at 7.0780), we highlighted that USD ‘is prone to break above 7.0960’. We added, ‘a breach of this degree will shift the main target to 7.1200’. Whereas USD rose above 7.0960 in early Asian commerce right this moment, situations are deeply overbought and seven.1200 could not come into sight so quickly. Total, solely a break of the ‘sturdy assist’ degree at 7.0500 (degree beforehand at 7.0280) would point out the USD just isn’t advancing additional.”
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