USD/CNH: Downward momentum picks up pace – UOB

Further losses appear on the table for USD/CNH once the 7.2850 level is cleared, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We expected “further USD weakness towards 7.2950.” We noted, “there is a minor support at 7.3020.” USD weakened less than expected as it rebounded from a low of 7.3016. Downward pressure has eased, and USD is unlikely to weaken further. Today, USD is more likely to trade in a range between 7.3020 and 7.3240.

Next 1-3 weeks: Our update from yesterday (24 Oct, spot at 7.3080) is still valid. As highlighted, downward momentum is building, but USD has to break clearly below 7.2850 before a sustained decline is likely. The chance of USD breaking clearly below 7.2850 will remain intact as long as it stays below 7.3260 in the next few days.