UOB analysts Quek Ser Leang and Lee Sue Ann have revised their outlook on the USD/CNH currency pair to neutral following a sharp rebound in the US dollar against the Chinese yuan, with the pair rising above 6.78 and reaching a high of 6.7817. This move invalidated their previous bearish stance on the USD/CNH, which had anticipated further declines in the dollar's value against the yuan [1].
In the near term, UOB expects the USD/CNH to consolidate within a defined range of 6.7620 to 6.7980, with 6.7850 and 6.7980 identified as key resistance levels. Support is noted at 6.7700 and 6.7660. The analysts believe that while the recent rise in the USD/CNH appears excessive, there is still scope for the dollar to test the 6.7850 level, though the next resistance at 6.7980 is unlikely to be breached imminently [1].
Looking further ahead, UOB notes that the rebound in USD/CNH could have the potential to challenge the 6.9720 level, suggesting that the upward momentum may persist if current trends continue. However, for now, the analysts maintain a neutral stance and expect the pair to trade within the specified band in the short term [1].
Previously, UOB had maintained a negative outlook on the USD/CNH, expecting the dollar to edge lower unless it breached the 6.7800 'strong resistance' level. The recent price action, with the pair breaking above this threshold, has led to a reassessment of their view, with downward momentum now considered to have faded [1].
CONCLUSION
UOB has shifted its USD/CNH outlook to neutral after the pair's sharp rebound above 6.78, invalidating its prior bearish stance. The analysts now expect consolidation within a defined range in the near term, with the possibility of further upside if momentum persists. Market participants are likely to monitor the key resistance and support levels identified by UOB for future direction.