USD/CNH now looks consolidative between 7.0500 and 7.2200 – UOB

Further side-lined trading is predicted in USD/CNH, likely within the 7.0500-7.2200 range in the next few weeks, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘consolidate and trade within a range of 7.1050/7.1700’ yesterday. Our view was incorrect as USD dropped sharply to 7.0901 in NY trade before rebounding. Despite the rebound, the underlying tone appears to be soft. That said, any further weakness in USD is likely limited to a test of 7.0800. Resistance is at 7.1270, followed by 7.1500.”

Next 1-3 weeks: “There is no change in our view from last Friday (30 Sep, spot at 7.1000). As highlighted, the recent USD rally has topped out for now. The current movement is likely the early stages of a consolidation phase. In view of the recent high volatility, USD could trade within a broad range of 7.0500/7.2200 for a period of time.”