USD/CNH remains consolidative for the time being – UOB

USD/CNH is forecast to trade comfortably within the 6.4240-4.4800 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘edge higher to 6.4630’ did not materialize as it traded sideways within a narrow range of 6.4429/6.4596. Momentum indicators are mostly neutral and further sideway-trading seems likely. Expected range for today, 6.4420/6.4650.”

Next 1-3 weeks: “Two days ago (04 Oct, spot at 6.4550), we highlighted that ‘while downward momentum has improved somewhat, it appears too soon to expect a sustained decline in USD’. We added, ‘looking ahead, USD has to close below 6.4240 before a sustained decline can be expected’. USD traded in a relatively quiet manner the past couple of days and the build-up in momentum has fizzled out. In the other words, the downside risk has dissipated. From here, USD is likely to trade between 6.4240 and 6.4800 for a period of time.”