USD/CNH can rise further to 7.2400 – UOB Group

Rebound amid apparent positive divergence suggests US Dollar (USD) could rise further to 7.2400 vs Chinese Yuan (CNH); strong resistance at 7.2800 is unlikely to come under threat. In the longer run, USD could range-trade for a few days before resuming its decline; the level to watch is at 7.1700, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Strong resistance at 7.2800 is unlikely to come under threat

24-HOUR VIEW: "USD fell to a low of 7.1846 yesterday and then rebounded. The rebound amid apparent positive divergence suggests there is room for USD to rise further to 7.2400. The strong resistance at 7.2800 is unlikely to come under threat. Support levels are at 7.2020 and 7.1900."

1-3 WEEKS VIEW: "Yesterday, USD extended its sharp decline from last Friday, reaching its lowest level since Nov last year. Although a further decline remains possible, the deeply oversold short-term conditions suggest that the USD may range-trade for a few days before resuming its decline. The level to watch is at 7.1700. On the upside, if USD breaks above the ‘strong resistance’ at 7.2800, it would mean that it is not declining further."