Chinese Yuan: Range trade persists, upside risk against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann expect USD/CNH to remain confined in a narrow intraday range, reflecting flat momentum indicators. Over the next 1–3 weeks, they still see scope for the Dollar to edge lower toward 6.7300 while resistance has shifted higher. On a 1–3 month horizon, they note tentative upward momentum that requires confirmation.

Short-term range with mild downside bias

"24-HOUR VIEW: USD traded in a tight range between 6.7427 and 6.7478 yesterday, closing largely unchanged at 6.7463 (+0.03%). Flat momentum indicators suggest USD is likely to continue to trade in a range, expected to be between 6.7410 and 6.7510."

"1-3 WEEKS VIEW: In our most recent narrative from last Monday (03 Aug, spot at 6.7490), we highlighted that “while USD edged lower last week, there has been no clear increase in downward momentum.” However, we were of the view that USD “could continue to edge lower toward 6.7300 as long as 6.7640 (‘strong resistance’ level) is not breached.” Last Friday, USD eked out a fresh low of 6.7400 before recovering. There has been no further increase in downward momentum, but there remains a chance for USD to edge lower toward 6.7300. On the upside, the ‘strong resistance’ level is now at 6.7580."

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