There’s a probability for US Greenback (USD) to rise above 7.1900 in opposition to Chinese language Yuan (CNH), however it may not be capable of keep a foothold above this stage. Within the longer run, growing momentum suggests USD could rise, however it’s too early to count on 7.2000 to become visible, UOB Group’s FX analysts Quek Ser Leang and Peter Chia word.
Rising momentum suggests USD could rise
24-HOUR VIEW: “USD rose to a excessive of seven.1850 on Monday. Yesterday (Tuesday), we indicated the next: ‘The advance solely resulted in a slight enhance in upward momentum, and whereas there’s room for USD to rise from right here, any advance is probably going restricted to a check of seven.1850. A transparent break above this stage seems unlikely. Assist ranges are at 7.1700 and seven.1650.’ Our view was not unsuitable, as after dipping to a low of seven.1697, USD rose to a excessive of seven.1855. Upward momentum continues to extend, albeit not considerably. As we speak, there’s a probability for USD to rise above 7.1900, however it may not be capable of keep a foothold above this stage. The main resistance at 7.2000 is unlikely to become visible. As we speak’s help ranges are 7.1780 and seven.1730.”
1-3 WEEKS VIEW: “We indicated yesterday (08 Jul, spot at 7.1750) that ‘the rise in momentum just isn’t robust sufficient to recommend a sustained rise.’ We identified that USD ‘to proceed to advance, USD should first shut above 7.1850.’ USD subsequently rose to 7.1855 earlier than closing at 7.1814 (+0.03%). Whereas USD didn’t shut above 7.1850, the growing upward momentum suggests USD could rise above 7.1900. Primarily based on the present momentum, it’s too early to count on 7.2000 to become visible. On the draw back, if USD breaks beneath 7.1630 (‘robust help’ stage was at 7.1600 yesterday), it will imply that USD just isn’t prepared to go greater.”
