FX Strategists at UOB Group noted USD/CNH is likely to move within the 6.5400-6.6200 range in the near-term.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘the rapid rise appears to be overdone and further USD strength is unlikely for today’. We added, ‘USD is more likely to consolidate and trade between 6.5540 and 6.5900’. While our view was not wrong, USD traded within a narrower and higher range than expected (6.5692/6.5972). The movement is viewed as an on-going consolidation phase and USD is likely to continue to trade sideways. Expected range for today; 6.5550/6.5890.”
Next 1-3 weeks: “We have held a negative view in USD for about 2 weeks now. In our latest narrative from last Friday (20 Nov, spot at 6.5720), we highlighted that ‘unless USD moves and stays below 6.5500 within these 1 to 2 days, prospect for a move to 6.5200 would diminish quickly’. USD dropped to 6.5455 yesterday (23 Nov) before rebounding strongly to end the day on a firm note at 6.5835 (+0.49%). While our ‘strong resistance’ level at 6.6000 is still intact, the rapid loss in momentum suggests that the weak phase in USD has run its course. From here, USD is deemed to have moved into a consolidation phase and is expected to trade between 6.5400 and 6.6200 for a period of time.”
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