UOB analysts Quek Ser Leang and Lee Sue Ann report that the USD/CNH currency pair has slipped toward the lower end of its recent trading range, which has been tightly confined between 6.7923 and 6.8033. The analysts note a rapidly increasing downward momentum in the US Dollar against the offshore Chinese Yuan, suggesting that the major support level at 6.7820 could be tested soon. However, they emphasize that it is currently unclear whether the USD has sufficient momentum to break decisively below this support level, and they continue to frame the price action within a 6.7820–6.8220 range unless a clear break occurs [1].
In the short term, the USD traded within a narrow range of 6.7964 to 6.8080 last Thursday, and closed largely unchanged at 6.7971, representing a slight decline of 0.05%. The analysts indicate that, for the downward momentum to persist, the USD must not break above 6.7995, with minor resistance at 6.7955. They reiterate that unless the 6.7820 support is breached and held, range trading is expected to continue [1].
Looking ahead, UOB suggests that a sustained break below the 6.7820 level could trigger a continued decline in the USD against the Yuan. However, as of now, the analysts expect the pair to remain within the established range, given the lack of clear directional cues in the price action [1].
CONCLUSION
The USD/CNH pair is approaching a critical support level at 6.7820, with analysts observing increased downward momentum but no decisive break yet. Market participants are advised to watch for a sustained move below this level, which could signal further USD weakness against the Yuan. For now, range-bound trading is expected to persist.