USD/CNH is likely to remain range-bound in the near term, with expected movement between 7.1200 and 7.1550, according to UOB Group FX strategists Quek Ser Leang and Peter Chia.
Short-Term Outlook (24-Hour View):
On Wednesday, UOB noted that while the USD’s tone had softened near 7.1475, any downside would likely remain limited to a lower trading range between 7.1380 and 7.1520. However, the USD unexpectedly dipped to 7.1242 before rebounding to close at 7.1377, down 0.17% on the day.
Analysts now believe the rebound from oversold levels suggests further weakness is unlikely in the immediate term, and instead expect the USD to consolidate within a narrower range of 7.1300 to 7.1480 today.
Medium-Term Outlook (1–3 Weeks):
UOB had turned bullish on USD/CNH on October 8 (with spot at 7.1475), expecting a move towards 7.1650, as long as the strong support at 7.1330 held. However, that support level was breached yesterday as the pair fell to 7.1242, invalidating the bullish setup.
Despite the loss of upward momentum, analysts highlight that there is no clear increase in downside momentum either. As such, USD/CNH is now likely to trade sideways, with a broader expected range of 7.1200 to 7.1550 in the coming days.