USD/CNH on the Edge: What UOB’s Tight Range Prediction Reveals About Hidden Market Moves

Ever stop to wonder if the US Dollar is playing a game of limbo—how low can it go before it hits the floor? Right now, it seems the USD is tiptoeing in a tightrope walk between 7.1150 and 7.1340, hesitant yet hinting at a possible tumble below 7.1000. UOB Group’s sharp-eyed analysts, Quek Ser Leang and Peter Chia, aren’t mincing words: the dollar’s mood is decidedly glum in the longer run. After a recent nosedive that left many guessing, the USD is now in a consolidation phase—just catching its breath before the next move. But here’s the kicker: unless it can break past strong resistance at 7.1500, the odds favor a slip further down. Are we watching a temporary pause or the calm before a storm? Let’s dive in and unpack what all this means for traders and investors alike. LEARN MORE.

US Dollar (USD) is likely to consolidate between 7.1150 and 7.1340. In the longer run, USD remains negative, and it could drop and potentially break below 7.1000, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD remains negative

24-HOUR VIEW: “Following the sharp drop in USD that reached a low of 7.1185, we indicated last Friday that USD ‘could test 7.1100 before stabilization can be expected.’ We added, ‘the next support at 7.1000 is unlikely to come into view.’ The subsequent price action did turn out as we expected, with USD trading in a range of 7.1160/7.1318. USD closed marginally higher at 7.1230, up by 0.03%. The price movements are likely part of a consolidation phase. Today, we expect USD to trade between 7.1150 and 7.1340.”

1-3 WEEKS VIEW: “We turned negative on USD early last week (see annotations in the chart below). Tracking the subsequent price movements, we indicated last Friday (29 Aug, spot at 7.1200) that USD ‘remains negative, and it could drop and potentially break below 7.1000.’ There is no change in our view. Overall, only a breach of 7.1500 (‘strong resistance’ previously at 7.1550) would indicate that USD is not ready to move below 7.1000.”