According to FX Strategists at UOB Group, USD/CNH is predicted to keep the 6.4600-6.5050 range unchanged for the time being.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘downward momentum is showing tentative signs of waning and this coupled with oversold conditions suggests that USD is unlikely to weaken much further’. We expected USD to ‘consolidate and trade between 6.4630 and 6.4850’. Our view for consolidation was not wrong even though USD traded within a narrower range than expected (6.4656/6.4789). Momentum indicators are mostly neutral and further consolidation would not be surprising, likely between 6.4630 and 6.4830.”
Next 1-3 weeks: “We continue to hold the same view as from Tuesday (24 Aug, spot at 6.4790). As highlighted, the outlook is mixed and USD could trade between 6.4600 and 6.5050 for a period of time. Looking ahead, the downside risk appears to be greater but USD has to close below the major support at 6.4500 before a sustained decline can be expected.”
