USD/CNH Trading Outlook: UOB Group Analysis

UOB Group anticipates the US Dollar (USD) will trade in a relatively narrow range against the Chinese Yuan (CNH) in the near term. Analysts indicate the pair is likely to fluctuate between 7.1760 and 7.1890.

Short-Term (24-Hour) View:

Following Tuesday's subdued price action, analysts noted that 'the price action provides no fresh clues, and we continue to expect range trading, probably between 7.1800 and 7.1950.' USD/CNH subsequently traded within 7.1783/7.1929 and closed largely unchanged at 7.1820 (-0.08%). UOB continues to expect range trading, but the softer underlying tone suggests USD is likely to trade in a lower range of 7.1760/7.1890.

Medium-Term (1-3 Weeks) View:

Two days prior, analysts highlighted that 'the buildup in downward momentum has largely faded.' They anticipated USD/CNH to 'trade in a range of 7.1730/7.2000.' This view remains unchanged.

Key Factors Influencing USD/CNH

The USD/CNH exchange rate is influenced by a variety of factors, including:

  • Monetary Policy: Decisions made by the Federal Reserve (US) and the People's Bank of China (PBOC) regarding interest rates and quantitative easing.
  • Economic Data: Releases of key economic indicators such as GDP growth, inflation, and employment figures from both the US and China.
  • Geopolitical Events: Global events and political tensions can impact investor sentiment and currency valuations.
  • Trade Flows: The balance of trade between the US and China affects the demand for each currency.

Understanding Range-Bound Trading

Range-bound trading occurs when an asset's price fluctuates between consistent high and low prices for a period. Traders often use technical analysis tools to identify these levels and capitalize on price movements within the range.

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.


Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

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