United Overseas Bank currency analysts are forecasting continued range-bound trading for the Chinese yuan against the US dollar, with potential upside emerging for the Chinese currency. UOB strategists Quek Ser Leang and Lee Sue Ann report that USD/CNH is expected to trade within tight intraday parameters as momentum indicators show flat readings.
Looking ahead over the next one to three weeks, UOB analysts project the dollar could gradually weaken toward the 6.7300 level against the offshore yuan, while noting that resistance levels have moved higher. The forecast suggests limited volatility in the near term but a directional bias favoring yuan strength.
The projection comes as markets continue monitoring US-China relations and monetary policy divergence between the Federal Reserve and People’s Bank of China. Traders holding dollar-yuan positions should prepare for grinding rather than dramatic moves.
FXnCO Insight
Currency traders should consider taking profits on long USD/CNH positions above current levels and watch for tactical yuan long entries if the pair approaches the 6.7300 target zone.
Source: FXStreet