UOB Group’s FX Strategists now expect USD/CNH to move into the 6.3600-6.3900 range in the next weeks.
24-hour view: “Yesterday, we expected USD to ‘continue to trade sideways within a range of 6.3750/6.3880’. Our view for sideway-trading was not wrong even though USD traded within a narrower range than expected (6.3763/6.3842). The underlying tone appears to have weakened and USD is likely to edge lower from here. That said, any weakness is expected to encounter strong support at 6.3680 (there is another support at 6.3730). Resistance is at 6.3830 followed by 6.3860.”
Next 1-3 weeks: “We highlighted last Friday (07 Jan, spot at 6.3900) that ‘upward momentum has improved slightly’ and we see room for USD to ‘edge higher to 6.4100’. However, USD has not been able to make any headway on the upside. Upward momentum has fizzled out and USD is likely to trade between 6.3600 and 6.3900 for now.”