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According to FX Strategists at UOB Group, USD/CNH is expected to keep navigating between the 6.9300/6.9800 band in the next weeks.

Key Quotes

24-hour view: “Our expectation for USD to ‘trade sideways’ yesterday was incorrect as it dropped to 6.9370 before rebounding. The recovery appears to have room to extend higher but any advance is unlikely to move above yesterday’s peak at 6.9662 (6.9580 is already quite a strong level). Support is at 6.9380 but the stronger level is at 6.9300.”

Next 1-3 weeks: “Our view from last Thursday (06 Aug, spot at 6.9400) wherein USD ‘is in a negative phase and break of 6.9300 critical support could lead to a quick move to 6.9050’ was proven wrong it breached the ‘strong resistance’ level at 6.9730 last Friday (high of 6.9763). While USD could still weaken further out, for the next 1 to 2 weeks, USD is likely to consolidate and trade sideways within a 6.9300/6.9800 range.”