USD/CNH now faces further side-lined trading – UOB

USD/CNH is now predicted to navigate within the 7.2800-7.3400 range in the next few weeks, argue Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: Yesterday, we expected USD to trade in a range between 7.2850 and 7.3150. USD then trade in a range of 7.2895/7.3160. In early Asian trade today, USD traded on strong note, and it is likely to rise further. That said, it is unlikely to reach the major resistance at 7.3400. In order to keep the momentum going, USD must not break below 7.2950 (minor support is at 7.3050). 

Next 1-3 weeks: We noted yesterday (20 Sep, spot at 7.3030) that “downward momentum has slowed.” We indicated that “if USD breaks above 7.3150, it would indicate that 7.2390 is not coming into view this time around.” USD broke above 7.3150 in NY trade. The price action suggests the downward pressure that started early last week has faded. From here, USD is likely to trade in a range, probably between 7.2800 and 7.3400.