USD/CNH’s price action is now forecasted to gyrate between 7.0400 and 7.1000 in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “We held the view yesterday that “break of 7.0500 could lead to further USD weakness towards 7.0420”. USD subsequently dropped to 7.0458 before staging a surprisingly strong rebound and closed at 7.0810 (+0.32%).The rapid swings have resulted in a mixed outlook. For today, USD could continue to trade in a choppy manner, likely between7.0550 and 7.0900.”
Next 1-3 weeks: “We highlighted the increased downside risk yesterday and indicated “if USD closes below 7.0500, it could weaken to 7.0350”. USD subsequently dropped to 7.0458 before rebounding strongly to take out the ‘strong resistance’ level at 7.0800 (high of 7.0831). Downward pressure has eased and USD does not appear to be ready to move lower just yet. From here, USD is expected to trade sideways, likely within a broad 7.0400/7.1000 range.”