Chinese Yuan: Range trade persists near 6.7450 against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH remains confined to a tight intraday range, with momentum indicators still flat and the pair expected to trade between 6.7400 and 6.7500. Over the 1–3 week horizon, they still see scope for a drift lower toward 6.7300 unless strong resistance at 6.7580 is breached.

Flat momentum keeps Dollar contained

"24-HOUR VIEW: When USD was at 6.7440 yesterday, we indicated that “momentum indicators are still mostly flat.” We also indicated that USD “could trade between 6.7400 and 6.7500.” USD subsequently traded between 6.7423 and 6.7479, closing largely unchanged at 6.7449 (-0.02%). Momentum indicators remain flat, and we continue to expect USD to trade between 6.7400 and 6.7500."

"1-3 WEEKS VIEW: In our most recent narrative from last Monday (03 Aug, spot at 6.7490), we highlighted that USD “could continue to edge lower toward 6.7300.” Although there has been no further increase in downward momentum, there is still a chance for USD to edge lower toward 6.7300. On the upside, a breach of 6.7580 (no change in ‘strong resistance’ level) would indicate that USD is likely to range-trade instead."

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