The US Dollar (USD) is likely to extend its advance against the Chinese Yuan (CNH), with scope to break above 7.1550 in the near term, according to UOB Group’s FX strategists Quek Ser Leang and Peter Chia. The analysts noted that price action continues to suggest upward momentum, with potential for USD/CNH to move toward 7.1650 in the coming sessions.
Short-term outlook: upside bias intact
In their 24-hour view, UOB analysts said they had previously expected USD/CNH to “trade in a range between 7.1340 and 7.1480.” The pair subsequently moved within a 7.1362–7.1490 range before closing at 7.1463, up 0.07% on the day.
“There has been a tentative buildup in momentum and today, USD is likely to edge higher, potentially breaking above 7.1550,” the analysts wrote, adding that the next resistance at 7.1650 is unlikely to be tested for now. To maintain upward momentum, USD/CNH must stay above 7.1380, with minor support seen near 7.1420.
Medium-term view: momentum supports gradual gains
Over the next one to three weeks, UOB maintains a mildly bullish outlook. The bank’s previous analysis on October 6, when USD/CNH traded around 7.1400, highlighted that “upward momentum is starting to build, but for a continued advance, USD must first break and hold above 7.1480.”
Since then, the pair reached 7.1490 before closing at 7.1463. “While we would have preferred a more decisive close above 7.1480, the price action suggests that USD could rise toward 7.1650,” UOB said. On the downside, a move below 7.1330 would indicate that bullish momentum has faded.
