United Overseas Bank currency strategists Quek Ser Leang and Lee Sue Ann are forecasting near-term consolidation for the Chinese yuan against the US dollar following its recent strengthening. The analysts expect USD/CNH to trade within a tight range between 6.7635 and 6.7755 over the next 24 hours as downward pressure on the dollar pairing has diminished. This assessment marks a shift from the yuan’s recent rally, suggesting the currency has entered a stabilization phase rather than continuing its advance against the greenback.
The consolidation call comes after significant yuan gains that pushed USD/CNH lower in recent sessions. Traders and brokers focused on Asian currency markets should prepare for reduced volatility in this pair during the immediate trading window, though the underlying bullish bias for the yuan remains intact according to UOB’s analysis.
FXnCO Insight
Traders should reduce position sizes and avoid aggressive directional bets on USD/CNH within the 6.7635-6.7755 band until a clear breakout emerges from this consolidation pattern.
Source: FXStreet