USD/CNH moved into a consolidative phase – UOB

In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, USD/CNH is now expected to navigate between 6.7200 and 6.8550 in the next few weeks.

Key Quotes

24-hour view: “Our view for USD to ‘trade in a range’ yesterday was incorrect as it soared to a high of 6.7900 before closing at 6.7700 (+0.35%). While upward momentum has not improved much, USD could advance to 6.8000 before the likelihood of a pullback increases. The next resistance at 6.8350 is unlikely to come into view. Support is at 6.7600, followed by 6.7400.”

Next 1-3 weeks: “We have held a negative USD view for more than a week now. Yesterday (17 Jan, spot at 6.7400), we highlighted that downward momentum is beginning to ease and a break of 6.7580 would indicate that the weakness in USD has stabilized. USD subsequently soared to a high of 6.7900. The price actions suggest USD has entered a consolidation phase and will likely trade between 6.7205 and 6.8550 for the time being.”