UOB senior technical strategist Quek Ser Leang expects the USD/CNH pair to remain confined in a narrow near-term range, with the dollar likely to trade between 6.7950 and 6.8100. Despite the slowdown in growth momentum, UOB still sees room to move towards 6.8300, while 6.7900 remains sturdy support. A break above the 21-week EMA at 6.8430 is needed over a 1-3 month horizon to signal a sustained recovery.
The dollar maintains a range with upside risk
“24-HOUR VIEW: USD rose to 6.8195 last Thursday and then retreated. On Friday, with USD trading at 6.8020, we indicated that “while USD may retreat further given the lack of a clear raise in downside momentum, any decline is likely to remain in the 6.7950/6.8100 range.” The USD rate then fluctuated between 6.7982 and 6.8094, closing at a substantially unchanged level of 6.8044 (+0.04%). There has been no change in the down or up trend and we continue to expect the USD to trade between 6.7950 and 6.8100.”
“1-3 WEEK OUTLOOK: We have maintained a positive view towards USD since mid-month. In our latest narrative from last Thursday (June 25, price 6.8130), we indicated that “increased momentum suggests USD could rise to 6.8300.” Although the upside momentum has moderated since then, unless the “strong support” at 6.7900 (without a change in the level) is broken, there is still a chance that the US dollar will reach the 6.8300 level.
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
