USD/CNH posed for extra consolidation – UOB

In opinion of FX Strategists at UOB Group, USD/CNH is expected to remain side-lined for the time being.

Key Quotes

24-hour view: “We highlighted yesterday that “further USD weakness is not ruled out” but added, “a breach of 6.9500 would come as a surprise”. USD subsequently dropped to 6.9575 before rebounding quickly. Downward pressure has more or less dissipated and the current movement is viewed as part of a consolidation phase. In other words, USD is expected to trade sideways for today, likely between 6.9650 and 6.9980.”

Next 1-3 weeks: “USD traded in a relatively choppy manner over the past few days as it gave up most of its gains from late last week over the past couple of days. For now, we continue to hold the same form last Thursday (06 Feb, spot at 6.9780) wherein USD is expected to trade within a broad 6.9500/7.0230 range.”