UOB’s Senior Technical Strategist Quek Ser Leang expects USD/CNH to remain confined in a tight near-term range, with the Dollar likely to trade between 6.7950 and 6.8100. Despite easing upward momentum, UOB still sees scope for a move toward 6.8300 while 6.7900 holds as strong support. On a 1–3 month horizon, a break above the 21-week EMA at 6.8430 is needed to signal a sustained recovery.

Dollar holds range with upside risks

"24-HOUR VIEW: USD rose to 6.8195 last Thursday and then pulled back. On Friday, when USD was at 6.8020, we indicated that “although there is room for USD to retreat further, given that there is no clear increase in downward momentum, any decline is likely to stay within a 6.7950/6.8100 range.” USD then traded between 6.7982 and 6.8094, closing largely unchanged at 6.8044 (+0.04%). There has been no shift in either downward or upward momentum, and we continue to expect USD to trade between 6.7950 and 6.8100."

"1-3 WEEKS VIEW: We have held a positive USD view since the middle of the month. In our most recent narrative from last Thursday (25 Jun, spot at 6.8130), we indicated that “the surge in momentum suggests USD could rise to 6.8300.” While upward momentum has since eased, as long as the ‘strong support’ at 6.7900 (no change in level) is not breached, there is still a chance for USD to head toward 6.8300"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)