Chinese Yuan: Short-term consolidation with bullish bias against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/CNH consolidating in the near term after recent downside moves. Their 24-hour view expects the Dollar to trade between 6.7635 and 6.7755 as downward pressure has eased. Over the 1–3 week horizon, they still anticipate a downside bias toward 6.7600 while 6.7820 caps the upside.

USD/CNH downside bias holds below resistance

"24-HOUR VIEW: Following Monday’s price action, we highlighted the following yesterday: “Downward momentum is building, and USD is likely to trade with a downside bias today. That said, USD does not appear to have enough momentum to break below 6.7600. To sustain the momentum build-up, USD must hold below 6.7755.” We were not wrong, as USD dipped to a low of 6.7635 before closing largely unchanged at 6.7688 (-0.02%). Downward pressure appears to have eased, and today, we expect USD to consolidate, most likely between 6.7635 and 6.7755."

"1-3 WEEKS VIEW: Our most recent narrative was from last Wednesday (15 Jul, spot at 6.7720), when we highlighted that “downward momentum is increasing, and USD is likely to trade with a downside bias toward 6.7600.” While the downside bias remains intact as USD eked out a fresh low of 6.7635 yesterday, downward momentum has slowed somewhat. That said, there is still a chance for USD to decline to 6.7600 as long as 6.7820 (no change in ‘strong resistance’ level) is not breached."