Chinese Yuan: Consolidation with downside risk toward 6.7330 – UOB

UOB’s Quek Ser Leang and Lee Sue Ann describe USD/CNH as consolidating after a move to 6.7200, with momentum slowing in the very near term. For the coming days and weeks, they see the pair likely trading between 6.7120 and 6.7220, while a rapid build-up in momentum suggests potential gains toward 6.7250 and major resistance at 6.7330. Longer term, they expect gradual downside while below 6.7815.

Range trade with upside potential

"24-HOUR VIEW: USD rose to 6.7200 yesterday before closing little changed at 6.7168 (+0.08%). Upward momentum appears to be slowing, but it is too early to expect a sustained pullback. Today, USD is more likely to consolidate at these higher levels, probably between 6.7120 and 6.7220."

"1-3 WEEKS VIEW: We turned neutral on USD two days ago (23 Sep, spot at 6.6965), and we expected it “to consolidate between 6.6900 and 6.7080.” We did not expect USD to break above 6.7080 as it rose to a high of 6.7200 yesterday. The rapid build-up in momentum suggests USD could rise to 6.7250, potentially reaching the major resistance at 6.7330."