USD/CNH risks a deeper pullback near term – UOB

According to UOB Group’s Markets Strategist Quek Ser Leang and Rates Strategist Victor Yong, USD/CNH could grind lower to the 7.1500 region in the short term.

Key Quotes

24-hour view: “The strong rebound in USD to 7.2686 came as a surprise (we were expecting USD to weaken further). We view the price movement as part of an on-going consolidation and expect USD to trade within a range of 7.2150/7.2650.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (27 Oct, spot at 7.1870). As highlighted, the recent USD strength has ended. The large pullback on Wednesday has room to extend to 7.1500, possibly 7.1300. However, a break of 7.2850 (no change in ‘strong resistance’ level) would indicate that the pullback is not extending lower.”