USD/CNH Downward Momentum Remains Limited, Support at 7.1500 Holds – UOB Group

USD/CNH: Downward Momentum Remains Limited, Support at 7.1500 Unlikely to Break – UOB Group

The US Dollar against the Chinese Yuan (USD/CNH) showed a modest decline last Friday, closing at 7.1720 after falling by 0.46%. Despite this dip, downward momentum remains weak and a test of the critical support level at 7.1500 is unlikely in the near term, according to FX strategists Quek Ser Leang and Peter Chia from UOB Group.

In the short term, the pair could see further modest pressure to test 7.1650 before stabilizing, but breaking below 7.1500 is considered improbable at this stage. Resistance levels are currently identified at 7.1870 and 7.1980, which could cap any near-term rebounds.

Looking at the medium-term outlook, the US Dollar's downward momentum has largely fizzled out after a recent range of trading between 7.1850 and 7.2450. As long as the pair stays below the strong resistance level at 7.2070, the bias remains tilted to the downside with a target around 7.1500.

Investors and traders are advised to monitor these key technical levels closely, as a breach of resistance could alter the current bearish bias, while a fall below support could accelerate losses.