USD/CNH: Further consolidation looks likely – UOB

USD/CNH is now forecast to trade in a consolidative fashion, likely between 6.4600 and 6.5000 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward pressure has waned and the current movement is viewed as part of a consolidation’ and we expected USD to ‘trade between 6.4670 and 6.4900’. Our view for consolidation was not wrong even though USD traded within a narrower range than expected (6.4735/6.4829). The quiet price actions offer no fresh clues and USD could continue to consolidate. However, the slightly weakened underlying tone suggests a lower trading range of 6.4660/6.4870.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (12 Jul, spot at 6.4810). As highlighted, the risk for a higher USD has dissipated. The current movement is viewed as part of a consolidation phase and USD could trade within a 6.4600/6.5000 range for a period of time.”