USD/CNH should face extra range bound trading in the short-term horizon, likely between 7.2200 and 7.3500, comment Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘consolidate and trade within a range’ last Friday was incorrect as it rose to a high of 7.2840. USD traded on a firm note in early Asian trade today and could edge higher. However, upward momentum is not strong and any advance is unlikely to break 7.3100 (there is another resistance at 7.2980) Support is at 7.2720, followed by 7.2620.”

Next 1-3 weeks: “In our latest narrative from last Thursday (27 Oct, spot at 7.1870), we indicated that the pullback in USD has room to extend to 7.1500, possibly 7.1300. USD then dropped to 7.1662 before rebounding strongly. The build-up in downward pressure faded quickly and USD is unlikely to pullback further. From here, USD could trade between 7.2200 and 7.3500 for a while.”