Chinese Yuan: Range trade holds with modest downside against US Dollar – UOB

UOB’s Quek Ser Leang notes that the US Dollar against the Chinese Yuan has stayed within the previously flagged range, with only modest upward momentum despite a push toward 6.8000. He still sees USD/CNH confined between 6.7750 and 6.8080 over the next 1–3 weeks, with nearby support at 6.7900 and 6.7850 and major resistance at 6.8080.

Dollar stays capped in defined range

"24-HOUR VIEW: Yesterday, we were of the view that USD “is likely to trade in a range between 6.7800 and 6.7930.” We were incorrect, as USD rose to a high of 6.7998. Despite the advance, upward momentum has not increased much. However, USD could potentially rise above 6.8000. The major resistance at 6.8080 is unlikely to come under threat. Support is at 6.7900, followed by 6.7850."

"1-3 WEEKS VIEW: Last Wednesday (01 Jul, spot at 6.7920), we highlighted that the recent USD “strength has come to an end.” We also highlighted that USD “is likely to trade in a range between 6.7750 and 6.8080.” Yesterday (06 Jul, spot at 6.7855), we reiterated our view. We indicated the following: “Although USD has been edging lower since then, there has been no clear increase in downward momentum. In other words, there is no change in our view.”"