US Dollar could test 7.3100 vs Chinese Yuan; a sustained break above this level seems unlikely. In the longer run, strong advance indicates there is potential for USD to rise to 7.3250, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
There is potential for USD to rise to 7.3250
24-HOUR VIEW: “When USD was at 7.2640 yesterday, we indicated that ‘the current price movements are likely part of a range trading phase, probably between 7.2530 and 7.2750.’ USD traded within our expected range until the NY session, when it lifted off and surged to a high of 7.3016. Conditions are deeply overbought, but provided that 7.2770 (minor support is at 7.2850) is not breached, USD could test 7.3100. A sustained break above this level seems unlikely today, and the major resistance at 7.3250 is also unlikely to come under trade.”
1-3 WEEKS VIEW: “We revised our USD view from negative to neutral yesterday (27 Feb, spot at 7.2640), indicating that ‘downward momentum has largely faded.’ We also indicated that USD ‘has likely entered a range trading phase and is expected to trade between 7.2400 and 7.2900 for the time being.’ The subsequent strong advance indicates there is potential for USD to rise to 7.3250. The upside risk will remain intact as long as USD does not break below the ‘strong support’ level, currently at 7.2600.”
Read the full article here