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22 May 2020

USD/CNH keeps the constructive outlook – UOB

FXStreet reports that despite the positive outlook for USD/CNH, the 7.1652 level is seen out of reach for the time being, noted FX Strategists at UOB Group.

24-hour view: “The sudden surge in USD that resulted in a relatively strong gain of +0.41% yesterday (7.1352) came as a surprise. The rapid advance appears to be running ahead of itself and while USD could move above the overnight high of 7.1361, a sustained advance above this level is unlikely (there is another strong resistance at 7.1450). Support is at 1.1200 but only a breach of 7.1140 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “USD popped above the top of our expected 7.0800/7.1350 range yesterday (high of 7.1361) before ending the day on a firm note at 7.1352. While upward momentum has picked up, USD does not appear to be ready to move higher in a sustained manner just yet. The overall outlook appears to be mildly positive and there is chance that USD could edge higher but the year-to-date high is a formidable resistance and may not break so easily. To look at it another way, only a daily closing above 7.1652 would ‘confirm’ a break-out. At this stage, the prospect for such a move is not high but it would continue to increase as long as the strong support at 7.0800 is not taken out.”

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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