USD/CNH: Expected to trade in a sideways range of 7.1990/7.2190 – UOB Group

US Dollar (USD) is expected to trade in a sideways range of 7.1990/7.2190. In the longer run, a breach of 7.2330 would indicate that the likelihood of USD declining to 7.1700 has faded, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Above 7.2330, the likelihood of USD declining to 7.1700 to fade

24-HOUR VIEW: "Following last Thursday’s price movements, we indicated on Friday that 'the quiet price action provides no fresh clues, and we continue to expect USD to trade sideways. Expected range for today: 7.1970/7.2190.' Our view of sideways trading was not wrong, as USD traded between 7.1954 and 7.2130, closing modestly higher by 0.07% at 7.2099. There has been no increase in either downward or upward momentum. Today, we expect USD to trade sideways between 7.1990 and 7.2190."

1-3 WEEKS VIEW: "We have held a negative USD view since early this month (as annotated in the chart below). Tracking the price movements, we highlighted last Friday (16 May, spot at 7.2040) that USD “has not been able to make significant headway on the downside. However, only a breach of 7.2330 (no change in ‘strong resistance’ level) would indicate that the likelihood of USD declining to 7.1700 has faded.” Our view remains unchanged."