USD/CNH now appears exposed to some range bound trade within 6.7270-6.7950, note Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the price movements are likely part of a broad consolidation range’ and we expected USD to ‘trade between 6.7300 and 6.7700’. USD subsequently traded within a narrower range than expected (6.7395/6.7598). Further consolidation appears likely, expected to be between 6.7400 and 6.7700.”
Next 1-3 weeks: “Last Friday (27 Jan, spot at 6.7310), we highlighted that downward momentum is building and we expected USD to weaken toward the month-to-date low near 6.6985. USD traded in a relatively quiet manner the past couple of days and downward momentum has faded quickly. USD is unlikely to weaken further. From here, USD is more likely to trade sideways within a range of 6.7270/6.7950.”