Usdcnh Faces Risk Of Pullback

Usdcnh Faces Risk Of Pullback by Adam Rosen last updated on December 16, 2023

USD/CNH Faces Risk Of Pullback Under 7.2850

UOB Group's analysts have made comments about the USD/CNH, which suggests that bearish pressure remains the dominant theme. As for a deeper decline in the USD/CNH, the 7.2850 level will need to be broken first!

Yesterday, the USD/CNH fail dropped to 7.3085, which was also the low for the day. Today, the dollar-selling theme continues to dominate the market, which is also seen in the USD/CNH pair as well.

7.3 Remains An Important Support Level

Looking ahead, the USD will continue to get weaker against the CNH and will likely reach 7.2950. Before that, there's also another support present at the 7.302 as well. However, the most important support level remains the 7.32, which needs to be broken before any further downside move will take place.

In the next 1 to 3 weeks, the dominant theme is USD selling. In fact, the greenback also lost 0.23% in the last trading day alone, which suggests the market's current mood.

For now, the CNH appears to be benefiting from the USD weakness, but that's not the only thing responsible for the USD/CNH downside. As of late, the data from China shows an uptick in various economic sectors, which is also allowing the CNH to gain the upper hand against the US Dollar.

With only the last quarter of 2023 left, it would be interesting to see how the USD/CNH price action develops! For now, the major analyst firms such as the UOB are hinting at the downside of the USD/CNH. In simple words, the CNH will appreciate while the USD will lose against the Chinese currency.

The apparent strength in the CNH will also allow other currencies, such as the NZD and the AUD, to appreciate as well. So, if we take the UOB's forecast as true, it means the next 3 months will not be in the favor of the US Dollar.

However, let's not forget that the 0.73 level needs to be broken first before any further support levels are reached.