Chinese Yuan: Sideways range holds against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH has been trading quietly, with intraday ranges clustered around current levels. Their 24-hour view suggests the Dollar is likely to stay confined within a narrow band, reflecting the lack of fresh directional clues from recent price action.

Dollar seen confined in tight range

"24-HOUR VIEW: Last Friday, USD traded in a quiet manner and closed marginally lower by 0.01% at 6.7441. When it was at 6.7430 yesterday, we stated that “the price action provides no fresh clues,” and we were of the view that USD “could trade between 6.7370 and 6.7470.” USD then traded within a tight range of 6.7377/6.7438, closing marginally lower by 0.01% at 6.7433. We are unable to derive much from the quiet price action. Today, USD could trade between 6.7390 and 6.7470."

"1-3 WEEKS VIEW: We have held the same view since early this month (03 Aug, spot at 6.7490), when we highlighted that USD “could continue to edge lower toward 6.7300.” Although USD eked out a fresh low of 6.7377 yesterday, there has been no clear increase in downward momentum. That said, there is still a chance for USD to edge lower toward 6.7300. Overall, only a breach of 6.7530 (no change in ‘strong resistance’ level) would indicate that the mild downward pressure has eased."