USD/CNH: Diminished odds for a move to 7.17 – UOB

FX Strategists at UOB Group now see declining likeliness of USD/CNH to reach the 7.17 level.

Key Quotes

24-hour view: “We highlighted yesterday that the ‘underlying tone has weakened somewhat’ and expected USD to ‘drift lower to 7.0600’. USD subsequently dropped to 7.0688 but opened on a weak note this morning. Downward pressure has picked up and from here, USD could move below 7.0600. For today, the strong support at 7.0350 is likely ‘safe’. Resistance is at 7.0950 followed by 7.1080.”

Next 1-3 weeks: “After surging to a high of 7.1652 last Thursday (19 Mar), USD has not been able to make much headway on the upside. The relatively sharp decline of -0.48% yesterday (24 Mar) has dented the upward momentum and the chance for USD to break the strong 7.1700 level has diminished. From here, unless USD moves and stays above 7.1200 within these 1 to 2 days, a break of 7.0350 (‘strong support’ level previously at 7.0180) would indicate that the recent upward pressure has dissipated.”