Further selling pressure appears likely in USD/CNH in the next weeks, note UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we expected USD to ‘trade sideways within a range of 6.7690/6.8000’. USD subsequently rose to a high of 6.7975, dropped to 6.7629 before closing at 6.7676 (-0.28%). Downward momentum is beginning to build and the risk for USD today is to the downside. While a break of the major support at 6.7500 would not be surprising, the next support at 6.7000 is unlikely to come into view. On the upside, a breach of 6.7920 (minor resistance is at 6.7800) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “There is not much to add to our update from Tuesday (10 Jan, spot at 6.7850). As highlighted, USD is likely to continue to weaken and a break of 6.7500 will shift the focus to 6.7000. Overall, only a breach of 6.8250 (‘strong resistance’ level was at 6.8350 yesterday) would indicate that the USD weakness that started last week has ended.”

This article was originally published by Fxstreet.com.Read the original article here.

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