In view of FX Strategists at UOB Group, USD/CNH is seen keeping the sideline theme intact in the next weeks.
Key Quotes
24-hour view: “USD traded sideways yesterday albeit at a narrower range than expected. Despite the firm opening this morning, momentum indicators are still mostly ‘neutral’ and USD is likely to continue to trade sideways. Expected range for today, 7.0130/7.0350″.
Next 1-3 weeks: “Two weeks ago (13 Nov, spot at 7.0200), we highlighted that USD has moved into a ‘broader consolidation phase’ and ‘USD is expected to trade sideways between 6.9750 and 7.0600 for a period’. When USD moved higher towards 7.0500, we indicated last Thursday (21 Nov, spot at 7.0475) that ‘we are not convinced that the current USD strength can be sustained’. We added, ‘only a clear move above 7.0600 would suggest further USD strength is likely’. The relatively sharp decline of -0.28% yesterday (26 Nov) reinforces our view. In other words, we continue to view the current movement in USD as part of a sideway-trading range. That said, after the rapid decline yesterday, we have adjusted the expected trading range to 6.9700/7.0500 from 6.9750/7.0600″.
Share
