Further consolidation, likely between 7.2950 and 7.3400, is expected in USD/CNH in the next few weeks, according to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: Last Friday, we noted “there is no clear directional bias,” and we expected USD to trade sideways between 7.2980 and 7.3220. While our view of sideways trading was not wrong, we did not anticipate the manner in which USD swung sharply between 7.2990 and 7.3215. There is still no clear directional bias, and we continue to expect USD to trade sideways. Expected range for today: 7.3000/7.3230. 

Next 1-3 weeks: Our most recent narrative was from last Tuesday (03 Sep, spot at 7.3215), wherein USD is likely to trade in a range between 7.2800 and 7.3600. Since then, USD has traded well within the range. We continue to expect USD to trade in a range, but in view of the decreased volatility, it is likely to trade in a narrower range of 7.2950/7.3400.