Further selling pressure could see USD/CNH retreating to the strong support at 7.2390, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
24-hour view: Yesterday, we expected USD to trade between 7.2600 and 7.2900. However, USD rose to a high of 7.2988. Despite the advance, upward momentum has not improved much. Today, we expect USD to trade in a range, likely between 7.2800 and 7.3050.
Next 1-3 weeks: Our update from yesterday (18 Sep, spot at 7.2760) still stands. As highlighted, while USD is likely to weaken further, the major support at 7.2390 might now come into view so soon. Overall, only a breach of 7.3150 (no change in ‘strong resistance’ level from previously) would indicate that the downward pressure that started early last week has faded.