USD/CNH: Bullish momentum has dissipated – UOB Group

Bearish momentum is increasing, but this will likely lead to a lower trading range of 7.3200/7.3500 rather than a sustained decline. In the long term, the bullish momentum has dissipated; The US Dollar (USD) is likely to trade in a range between 7.3100 and 7.3650. UOB Group FX analysts Quek Ser Leang and Peter Chia point out.

Bearish momentum is increasing

24-HOUR VIEW: “The USD traded calmly last Thursday. On Friday, we noted that ‘flat momentum indicators continue to suggest range trading, likely between 7.3380 and 7.3550.’ Subsequently, USD traded in a wider range of 7.3338/7.3578. It opened on a soft note in early Asian trading today Although the bearish momentum is increasing, this will likely lead to a lower trading range of 7.3200/7.3500 in. place of a sustained decline.”

1-3 WEEK VIEW: We have held the view that ‘there is room for USD to retest 7.3700’ since early last week. On Tuesday (Jan 14, spot at 7.3410), we noted that ‘bullish momentum is beginning to fade, and a break of 7.3250 (‘strong support’ level) would suggest that 7.3700 is not in sight.’ The USD has traded calmly in recent days, and the bullish momentum has dissipated. There has been a slight increase in bearish momentum, but it is not enough to indicate a sustained decline. From here, we expect the USD to trade in a range, probably between 7.3100 and 7.3650.”

Source: Fx Street

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