Further consolidation seen around USD/CNH – UOB

FX Strategists at UOB Group suggested USD/CNH is expected to keep the 6.93-7.02 range for the time being.

Key Quotes

24-hour view: “We expected USD to ‘stay under mild downward pressure’ but highlighted that ‘any weakness is viewed as a lower trading range of 6.9550/6.9750’. USD subsequently traded in a quiet manner between 6.9570 and 6.9742. Momentum indicators are mostly neutral and further sideway-trading would not be surprising. Expected range for today, 6.9600/6.9800.”

Next 1-3 weeks: “While USD plunged to 6.9247 in mid-December, but it snapped higher almost immediately. The price action has resulted in a mixed outlook and USD could trade in an ‘undecided’ manner between 6.9300 and 7.0200 for a period. From here, the slightly weak underlying tone suggests the bottom of the expected range at 6.9300 is more vulnerable.”