Chinese Yuan: Short-term consolidation with bullish bias against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/CNH consolidating in the near term after recent downside moves. Their 24-hour view expects the Dollar to trade between 6.7635 and 6.7755 as downward pressure has eased. Over the 1–3 week horizon, they still anticipate a downside bias toward 6.7600 while 6.7820 caps the upside.

USD/CNH downside bias holds below resistance

"24-HOUR VIEW: Following Monday’s price action, we highlighted the following yesterday: “Downward momentum is building, and USD is likely to trade with a downside bias today. That said, USD does not appear to have enough momentum to break below 6.7600. To sustain the momentum build-up, USD must hold below 6.7755.” We were not wrong, as USD dipped to a low of 6.7635 before closing largely unchanged at 6.7688 (-0.02%). Downward pressure appears to have eased, and today, we expect USD to consolidate, most likely between 6.7635 and 6.7755."

"1-3 WEEKS VIEW: Our most recent narrative was from last Wednesday (15 Jul, spot at 6.7720), when we highlighted that “downward momentum is increasing, and USD is likely to trade with a downside bias toward 6.7600.” While the downside bias remains intact as USD eked out a fresh low of 6.7635 yesterday, downward momentum has slowed somewhat. That said, there is still a chance for USD to decline to 6.7600 as long as 6.7820 (no change in ‘strong resistance’ level) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)