Chinese Yuan: Range trade holds with bullish tone against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/CNH confined to a narrow intraday range, with flat momentum suggesting consolidation between 6.7450 and 6.7550. Their 1–3 week view still anticipates the Dollar edging lower toward 6.7300 while 6.7640 caps the upside, and over 1–3 months a sustained recovery requires a break above the 21-week EMA at 6.8430.

Dollar seen consolidating in tight band

"24-HOUR VIEW: Following Wednesday’s price movements, we highlighted the following yesterday: “Despite the quiet price action, the underlying tone appears to be soft, and there is a chance for USD to test 6.7420. However, a continued decline below this level still appears unlikely. On the upside, resistance is at 6.7550.” USD subsequently traded in a quiet manner between 6.7457 and 6.7518, closing unchanged at 6.7483. Flat momentum indicators suggest range-trading today, most likely between 6.7450 and 6.7550."

"1-3 WEEKS VIEW: In our most recent narrative from Monday (03 Aug, spot at 6.7490), we highlighted that “while USD edged lower last week, there has been no clear increase in downward momentum.” However, we were of the view that USD “could continue to edge lower toward 6.7300 as long as 6.7640 (‘strong resistance’ level) is not breached.” Although USD has not been able to make further headway on the downside, we will continue to hold the same view for now."