USD/CNH now faces some consolidation – UOB

FX Strategists at UOB Group now believe USD/CNH has moved into a consolidative range.

Key Quotes

24-hour view: “The sharp and rapid drop in USD last Friday came as a surprise as it closed at 7.1340 before extending its decline this morning. The swift decline appears to have scope to extend lower towards 7.1150. Resistance is at 7.1400 followed by 7.1500.”

Next 1-3 weeks: “The sudden sharp sell-off in USD last Friday took out our ‘strong support’ level at 7.1400. The break of the ‘strong support’ indicates that the positive phase in USD that started on Thursday (28 May, spot at 7.1800) ended much sooner than expected. The sharp but short-lived advance has resulted is a mixed outlook. From here, USD could trade sideways between 7.0950 and 7.1750 for a period.”