USD / CNH Continues to be a Corrective in the Short-Term

USD / CNH Continues to be a Corrective in the Short-Term

UOB Group FX Strategists believe that the recovery in the USD / CNH pair is facing a difficult obstacle in the 7.040 region. 24-hour outlook: “Yesterday it was stated that the US Dollar to drop below 6.9650, but it is unlikely that the big support at 6.9500 will enter the picture”. The USD later fell to 6.9645 and rose + 0.63% (7.0167). Although the rapid rise seems to be self-advancing, there is enough momentum to move the USD to the level of 7.0250, possibly up to 7.0300. The next 1-3 weeks: “It has been expected that USD to weaken since then, and it is stated that the chances of a transition to the 6,9500 level have increased, according to yesterday's latest updates. It reached 6.9645 before the USD made a dramatic comeback after reaching 7.0174. A break of the 'strong resistance' level at 6.9920 indicates that the USD is no longer under pressure. Current USD strength is seen as part of a corrective recovery, but any progress at this stage is expected to face solid resistance at 7.0400. On the downside, the 'strong support' level is seen as 6.9750. "