USD/CNH is still expected to keep the trade between 6.4400 and 6.500 for the time being, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we highlighted that we ‘see chance for USD to test 6.4900’ but we were of the view that ‘the major resistance at 6.5000 is unlikely to come into the picture’. Our view was not wrong as USD rose to 6.4945 before pulling back sharply. The pullback has room to extend lower but any weakness is expected to encounter solid support at 6.4700 (minor support is at 6.4740). Resistance is at 6.4880 followed by 6.4940.”
Next 1-3 weeks: “Our latest narrative from last Thursday (22 Jul, spot at 6.4660) still stands. As highlighted, USD is still in a consolidation and it could trade sideways between 6.4400 and 6.5000 for a period of time. Looking ahead, the upside risk appears to greater but USD has to close above 6.5000 before a sustained advance can be expected.”