The Chinese Yuan's recent performance against the US Dollar has been a topic of interest, with analysts at UOB offering their insights. The USD/CNH pair has experienced a notable decline, dropping to 6.7766 before rebounding, indicating a period of consolidation. This sharp fall has led to a range-bound scenario, with analysts predicting intraday trading between 6.7780 and 6.7920 over the next 1-3 weeks. The longer-term outlook suggests that any sustained recovery will require a break above the 21-week EMA at 6.8430.
UOB's analysts, Quek Ser Leang and Lee Sue Ann, provided a detailed breakdown of their expectations. In their 24-hour view, they anticipated a downward momentum, but not to the extent of 6.7800. This prediction proved accurate, as the USD rebounded from 6.7766, closing 0.21% lower at 6.7818. The stabilization of the sharp decline suggests that the USD/CNH pair is likely to consolidate within the mentioned range.
Looking ahead, UOB's 1-3 week outlook remains unchanged, with a focus on the range between 6.7700 and 6.8100. This perspective highlights the building upward momentum, which could potentially lead to a higher target of 6.8195 if the USD closes above 6.8080. However, the analysts also note that the strong support level of 6.7700 has not been breached, indicating a cautious approach.
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