USD/CNH: Further range bound likely in the short term – UOB

USD/CNH is likely to extend the consolidation within the 7.2500-7.3300 range for the time being, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We highlighted last Friday that USD “appears to have moved into a consolidation phase”, and we expected it to trade in a range between 7.2700 and 7.3000.” USD then traded in a narrower range than expected (7.2815/7.3015). The underlying tone has softened, and USD is likely to trade with a downward bias today. However, any decline is unlikely to break the major support at 7.2500. Resistance is at 7.2910, followed by 7.3020. 

Next 1-3 weeks: Our latest narrative was from last Thursday (24 Aug, spot at 7.2840) when we highlighted that, “the recent buildup in upward momentum has eased, and USD is likely to trade in a range of 7.2500/7.3300 for the time being.” There is no change in our view.