USD/CNH: Upward momentum has slowed – UOB Group

Brief decline did not lead to a clear increase in downward momentum; USD is likely to trade in a 7.2550/7.2750 range. In the longer run, upward momentum has slowed; a breach of 7.2500 would indicate that USD has moved into a range trading phase, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Below 7.2500, USD to move into a range trading phase

24-HOUR VIEW: "USD dropped to 7.2532 yesterday. The decline was, however, brief, as it rebounded quickly to close largely unchanged at 7.2651 (-0.06%). The brief decline did not lead to a clear increase in downward momentum. Today, instead of continuing to decline, USD is more likely to trade in a 7.2550/7.2750 range."

1-3 WEEKS VIEW: "When USD was at 7.2655 last Wednesday (26 Mar), we highlighted that 'there appears to be enough momentum for USD to rise to 7.2820.' After USD rose to 7.2822, we highlighted on Thursday (27 Mar, spot at 7.2765) that 'momentum has improved further, and USD could continue to rise to 7.2980.' Yesterday, USD fell to a low of 7.2532. Although upward momentum has slowed, only a breach of 7.2500 (no change in ‘strong support’ level from previously) would indicate that USD has moved into a range trading phase."