UOB Group’s FX Strategists noted further consolidation is expected in USD/CNH in the next weeks.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘momentum indicators are mostly neutral’ and we expected USD to ‘trade sideways between 6.3500 and 6.3700’. While our view for sideway-trading was not wrong, USD traded within a narrower range than expected (6.3576/6.3689). The quiet price actions offer no further clues and we continue to expect USD to trade sideways. Expected range for today, 6.3500/6.3700.”

Next 1-3 weeks: “There is no change in our view from yesterday (07 Feb, spot at 6.3600). We continue to view the current movement as part of a consolidation phase and expect USD to trade between 6.3400 and 6.3805 for now.”