UOB’s Quek Ser Leang and Lee Sue Ann report a sharp rebound in USD/CNH above 6.78, which invalidated their prior bearish view. They now see the pair as neutral, expecting consolidation between 6.7620 and 6.7980 near term, with 6.7850 and 6.7980 acting as key resistance levels. On a longer horizon, the rebound still has scope to challenge 6.9720.

Dollar-Yuan rebound shifts stance to neutral

"24-HOUR VIEW: Yesterday, we held the view that USD “is likely to edge higher within a range of 6.7610/6.7710.” We did not expect USD to soar to 6.7817. While the sharp rise appears excessive, there is scope for USD to test 6.7850. The next resistance at 6.7980 is unlikely to come under threat. Support is at 6.7700, followed by 6.7660."

"1-3 WEEKS VIEW: We have held a negative USD view since last week. On Tuesday (02 Jun, spot at 6.7640), we indicated the following: “Downward momentum remains mild, but the decline has not stabilised. Overall, only a breach of 6.7800 (‘strong resistance’) would indicate that the decline has stabilised. Until then, USD could continue to edge lower. The next level to watch is 6.7500.” Yesterday, USD staged a strong rebound and broke above 6.7800, printing a high of 6.7817. Downward momentum has faded, and we are neutral on USD now, and expect it to trade between 6.7620 and 6.7980 for the time being."

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