USD/CNH Consolidation Continues as UOB Analysts Predict Further Downward Pressure
Analysts at United Overseas Bank (UOB) have reaffirmed their view that the US Dollar will continue to consolidate against the Chinese Yuan. According to Quek Ser Leang and Lee Sue Ann, the USD/CNH rate is expected to stay within a narrow range of 6.7450 and 6.7550. In fact, they expect flat momentum indicators to suggest range-trading today.
Although the analysts anticipate some downward pressure on the US Dollar, they believe that it will not break below 6.7420. On the upside, resistance is seen at 6.7550. The analysts have maintained their view from Monday, when they noted that while the US Dollar edged lower last week, there was no clear increase in downward momentum.
Looking ahead, Quek Ser Leang and Lee Sue Ann expect the USD to edge lower toward 6.7300 over the next 1-3 weeks. However, this is contingent on the rate not breaching the 'strong resistance' level of 6.7640. A sustained recovery in the US Dollar would require a break above the 21-week EMA at 6.8430.