Chinese Yuan: Consolidates against US Dollar – UOB

UOB’s Quek Ser Leang notes USD/CNH slipped to 6.7865 before rebounding, with oversold conditions suggesting limited further downside and an intraday 6.7860–6.7990 range. On a 1–3 week view, the earlier bullish bias has ended after a break below 6.7900, with the pair now expected to range between 6.7750 and 6.8080. Medium term, a recovery requires a break above the 21-week EMA at 6.8430.

Dollar-Yuan shifts from uptrend to consolidation

"24-HOUR VIEW: We expected USD to “trade in a range between 6.7940 and 6.8080” yesterday. Our view was incorrect, as it dropped to 6.7865, rebounding from the low to close at 6.7911 (-0.14%). The rebound from oversold conditions suggests USD is unlikely to weaken much further. Today, we expect USD to trade between 6.7860 and 6.7990."

"1-3 WEEKS VIEW: Tracking our positive USD view from the middle of last month, we highlighted on Monday (29 Jun, spot at 6.8030) that “while upward momentum has eased, as long as the ‘strong support’ level at 6.7900 is not breached, there is still a chance for USD to head toward 6.8300.” USD fell and broke below 6.7900 yesterday (low was 6.7865). Upward momentum has faded, and USD strength has come to an end. From here, we expect USD to trade in a range, most likely between 6.7750 and 6.8080."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)