Further rangebound expected in USD/CNH – UOB

In opinion of FX Strategists at UOB Group, USD/CNH faces extra consolidation in the next weeks.

Key Quotes

24-hour view: “We noted yesterday that ‘downward pressure has dissipated’ and expected USD to ‘consolidate and trade between 7.0800 and 7.1050’. USD subsequently traded within a higher range than expected (between 7.0840 and 7.1118) before ending the day slightly higher at 7.1072. While USD is likely to continue to consolidate, the underlying tone has improved somewhat and this would likely translate in a higher trading range of 7.1000/7.1220.”

Next 1-3 weeks: “After dropping sharply late last week, USD has not been able to make much headway on the downside. Downward pressure has eased and our expectation for USD to move toward the end-April low of 7.0535 is not likely to work out. From here, USD is more likely to trade sideways and within a broad range of 7.0700 and 7.1400 for a period.”