USD/CNH faces strong resistance at 7.1652 – UOB

FX Strategists at UOB Group noted the outlook on USD/CNH remains constructive with a tough hurdle in the 7.1652 level.

Key Quotes

24-hour view: “After soaring to a high of 7.1645 last Friday (22 May), USD traded in a quiet manner between 7.1470 and 7.1580 yesterday (25 May). Upward momentum has eased and the current movement is viewed as the early stages of a correction phase. In other words, USD is expected to trade sideways to slightly lower today, likely between 7.1280 and 7.1500.”

Next 1-3 weeks: “We highlighted last Friday (22 May, spot at 7.1290) that the outlook for USD “is mildly positive”. We added, “the year-to-date high at 7.1652 is a formidable resistance” and only a daily closing above this level would ‘confirm’ a break-out. USD subsequently soared to 7.1642 before easing off. For now, there is no change in our view and only a break of 7.1100 (‘strong support’ level previously at 7.0800) would indicate the current upward pressure has eased.”