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FX Strategists at UOB Group still expect USD/CNH to trade in a consolidative fashion in the short-term horizon.

Key Quotes

24-hour view: “USD dropped to a low of 7.0586 yesterday before rebounding. The price action was in line with our expectation wherein USD ‘could move lower to 7.0600 but 7.0550 is unlikely to come into the picture’. The underlying tone still appears to be on the soft side and this could translate into a lower trading range of 7.0550/7.0750 for today (a sustained decline below 7.0550 is not expected).”

Next 1-3 weeks: “USD traded within relatively narrow range the last couple of days. For now, there is no change to our latest narrative from last Thursday (25 Jun, spot at 7.0760). As highlighted, USD is expected to trade sideways, likely within a broad 7.0400/7.1000 range for now.”