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USD/CNH: Retracement could retest 7.1500 ahead of 7.1300 – UOB

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Further decline in USD/CNH may want to see the 7.1500 place revisited in advance of 7.1300 in the subsequent weeks, remark Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann.

Key Quotes
24-hour view: “While we held the view the day before today that USD ‘is not going to boost further’, we anticipated it to ‘trade between 7.2950 and 7.3550’. The subsequent sharp sell-off to a low of 7.1826 got here as a surprise. The sharp and swift selloff is deeply oversold but with no signal of stabilization simply yet, USD ought to weaken further. However, a clear destroy of 7.1500 is unlikely. Resistance is at 7.2050 however solely a spoil of 7.2350 would point out that the weak point has stabilized.”

Next 1-3 weeks: “Yesterday (26 Oct, 7.3300), we indicated that whilst upward momentum has waned somewhat, there is nevertheless risk for USD to upward push to the primary resistance at 7.4000. We truly did now not count on the outsized selloff as USD nose-dived by using 1.74% (NY shut of 7.1880), its biggest 1day drop on record. The destroy of our ‘strong support’ at 7.2600 shows that the rally in USD that commenced two weeks in the past (see annotations in the chart below) has ended. The contemporary massive pullback has room to prolong to 7.1500, perchance 7.1300. On the upside, a wreck of the ‘strong resistance’ at 7.3000 would point out that the fast build-up in downward momentum has eased.”

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