The Chinese yuan continues its range-bound trading pattern against the US dollar, with downside risks persisting for the currency, according to UOB Group’s latest technical analysis. Senior Technical Strategist Quek Ser Leang projects USD/CNH will remain trapped in a narrow near-term band between 6.7950 and 6.8100, indicating limited immediate volatility for the pair.
Despite weakening upward momentum in recent sessions, UOB maintains that the dollar has room to climb toward the 6.8300 level, provided key support at 6.7900 remains intact. The analysis suggests yuan weakness could continue in the coming sessions, presenting challenges for Chinese exporters and companies with dollar-denominated debt obligations. Traders focused on the offshore yuan should monitor the 6.7900 support level closely, as a break below could shift the technical outlook.
FXnCO Insight
Traders should prepare for continued range-bound action in USD/CNH while watching for a potential breakout toward 6.8300 if support at 6.7900 holds firm.
Source: FXStreet