Any decline might not be able to reach 7.1750 – UOB Group

US Dollar (USD) could edge lower against Chinese Yen (CNH), but any decline might not be able to reach 7.1750. In the longer run, USD appears to have moved into a 7.1600/7.2240 range trading phase, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD may have moved into the long term 7.1600/7.2240 range

24-HOUR VIEW: “USD dropped by 0.26% last Friday, closing at 7.1910. There has been a buildup in downward momentum, albeit not by much. Today, USD could edge lower, but any decline might not be able to reach 7.1750 (there is another support level at 7.1820). Resistance is at 7.1970, followed by 7.2080.”

1-3 WEEKS VIEW: “After USD surged to a high of 7.2140, we highlighted last Thursday (31 Jul, spot at 7.2040), that ‘the sharp rally appears to be excessive, but as long as USD holds above 7.1750 (‘strong support’ level), there is a chance for it to rise further to 7.2250.’ Last Friday, USD rose to a high of 7.2240 and then dropped sharply, reaching a low of 7.1888. While our ‘strong support’ level has not been breached yet, upward momentum has fizzled out after the sharp decline. USD appears to have moved into a range trading phase. For the time being, we expect USD to trade in a range of 7.1600/7.2240.”