Considering the recent price action, USD/CNH is now seen trading between 7.1300 and 7.2450, comment UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: Yesterday, we indicated that USD could rise to 7.2000. However, we were of the view that “a sustained rise above this level is unlikely.” USD rose more than expected as it soared to 7.2151 before pulling back. Despite the advance, upward momentum has not improved much, and USD is unlikely to strengthen much further. Today, USD is more likely to trade in range, probably between 7.1830 and 7.2180.

Next 1-3 weeks: There is not much to add to our update from yesterday (02 Aug, spot at 7.1800). As highlighted, the current price actions are likely part of a consolidation phase. For the time being, USD is likely to trade in a range of 7.1300/7.2450.