USD/CNH clings to the consolidative theme so far – UOB

In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, USD/CNH is expected to stick to the current range bound theme between 6.8500 and 6.9200 for the time being.

Key Quotes

24-hour view: “We expected USD to trade with a downward bias last Friday but we held the view that ‘a clear break below 6.8500 is unlikely’. We did not expect the volatile price actions as USD plunged to 6.8303 and snapped back up to end the day little changed at 6.8696 (-0.01%). USD traded on a firm note in early Asian trade and upward momentum is building. That said, any advance is expected to face solid resistance at 6.9000. Support is at 6.8700, followed by 6.8600.”

Next 1-3 weeks: “Last Friday (14 Apr, spot at 6.8700), we noted that ‘downward momentum is showing tentative signs of building’. However, we indicated that USD ‘has to break clearly below 6.8500 before a sustained decline is likely’. While USD took out 6.8500 and plunged to 6.8303, the decline was short-lived as it soared to a high of 6.8760 in NY trade before extending its gains in Asian trade. The price actions suggest there is no clear USD direction and for the time being, it could trade in a relatively broad range of 6.8500/6.9250.”