The US dollar (USD) may test the major support level at 7.1200 before a more substantial recovery takes hold, according to UOB Group FX analysts Quek Ser Leang and Peter Chia. While a longer-term downward bias is emerging, a sustained decline would require USD to close below 7.1100.
24-hour view: range trading expected
After sliding to a low of 7.1218 during the New York session last Friday, USD rebounded slightly to close at 7.1266 (-0.13%). Analysts note that downward momentum remains limited, making a clear break below 7.1200 unlikely. On the upside, a move above 7.1375—supported by minor resistance at 7.1340—could signal that USD has entered a range-trading phase.
1-3 week view: downward bias building
UOB’s previous analysis (03 Sep, spot at 7.1400) indicated that USD/CNH is likely trading within a range of 7.1200 to 7.1650. Last Friday’s dip to 7.1218 reflected increased, though still modest, downward pressure. While the overall bias remains toward the downside, a decisive close below 7.1100 is needed for a sustained decline. Analysts maintain that the probability of such a move remains low, provided the 7.1500 level is not breached.
