CFD Trading Rate US Dollar vs Chinese Renminbi Yuan (USDCNH)

Room for the US Dollar (USD) to edge higher to 7.1500 before levelling off. In the longer run, momentum is slowing; a breach of 7.0900 would indicate that USD is more likely to trade in a range instead of strengthening further, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Momentum is slowing

24-HOUR VIEW: “We expected USD to trade in a range between 7.0990 and 7.1330 yesterday. USD subsequently dipped to 7.1081, then rebounded to 7.1380. USD closed at 7.1365, higher by 0.29%. The advance resulted in a slight increase in momentum. Today, we see room for USD to rise to 7.1500 before levelling off. The major resistance at 7.1600 is unlikely to come into view. On the downside, a breach of 7.1200 (minor support is at 7.1280) would indicate that the current mild upward bias has eased.”

1-3 WEEKS VIEW: “Our update from yesterday (21 Oct, spot at 7.1170) remains valid. As highlighted, the recent buildup in momentum is slowing, and a breach of 7.0900 would indicate that USD is more likely to trade in a range instead of strengthening further. Looking ahead, USD has to break and remain above 7.1500 before an advance to 7.1600 can be expected.”

China cut the 1Y and 5Y LPR by 25bps on Monday to 3.10% and 3.60% respectively. USD/CNH had surged to mid-7.13 levels amid broad USD strength, DBS’ FX analyst Philip Wee notes.

RMB market mood shifts amid a resurgent Trump

“China cut the 1Y and 5Y LPR by 25bps on Monday to 3.10% and 3.60% respectively. These cuts to benchmark lending rates were expected given a 20bps cut to the 7D reverse repo rate in late September, and are part of a broader policy push to stimulate growth in China.” 

“USD/CNH had surged to mid-7.13 levels amid broad USD strength, opening a gap with the onshore CNY fixing. RMB flows have become more two-way, after an earlier bout of equity inflows into China briefly led to a dip in USD/CNH below 7.”

“We had flagged US election and trade risks as reasons to be restrained on RMB optimism earlier, and it seems the RMB market mood has indeed shifted amid a resurgent Trump.”

The US Dollar (USD) is likely to trade in a range between 7.0990 and 7.1330. In the longer run, momentum is slowing; a breach of 7.0900 would indicate that USD is more likely to trade in a range instead of strengthening further, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

After breaking below 7.0900 USD to stop going up

24-HOUR VIEW: “Our view for USD to trade in a range between 7.1180 and 7.1480 last Friday was incorrect. Instead of trading in a range, USD dropped to a low of 7.1096, closing at 7.1159 (-0.29%). Despite the decline, there has been no clear increase in downward momentum. Today, we continue to expect USD to trade in a range, probably between 7.0990 and 7.1330.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Wednesday (16 Oct, spot at 7.1350), wherein the recent strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900. We added, ‘To keep the momentum going, USD must not break below the ‘strong support’ level, now at 7.0900.’ After the strong rise, USD has not been able to build on its gain. Momentum is beginning to slow, and a breach of 7.0900 would indicate that USD is more likely to trade in a range instead of strengthening further.”

USD is likely to trade in a range between 7.1180 and 7.1480. In the longer run, strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notes.  

To trade in a range between 7.1180 and 7.1480

24-HOUR VIEW: “Yesterday, we pointed out that ‘the current price movements are likely part of a range trading phase.’ We expected USD to ‘trade between 7.1100 and 7.1430.’ USD then traded in a 7.1260/7.1468 range, closing largely unchanged at 7.1365 (+0.03%). Further range trading seems likely today, probably between 7.1180 and 7.1480.”

1-3 WEEKS VIEW: “Our update from two days ago (16 Oct, spot at 7.1350) remains valid. As indicated, “the strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900. To keep the momentum going, USD must not break below the ‘strong support’ level, now at 7.0900.”

The US Dollar (USD) is likely to trade in a range between 7.1100 and 7.1430. In the longer run, strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD to trade in a range between 7.1100 and 7.1430

24-HOUR VIEW: “Two days ago, USD soared. Yesterday, we indicated that ‘USD strength is likely to continue’ Our view did not turn out, as USD traded in a relatively quiet manner between 7.1138 and 1.7383, closing largely unchanged at 7.1345 (-0.03%). The current price movements are likely part of a range trading phase. Today, we expect USD to trade between 7.1100 and 7.1430.”

1-3 WEEKS VIEW: “After USD soared two days ago, we turned positive in USD yesterday (16 Oct, spot at 7.1350), indicating that ‘the strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900. We highlighted that ‘to keep the momentum going, USD must not break below the ‘strong support’ level, now at 7.0900.’ There is no change in our view.”

USD strength is likely to continue; the levels to monitor are 7.1480 and 7.1600. In the longer run, strong and sudden surge suggests further USD strength to 7.1600, potentially 7.1900, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Levels to monitor are 7.1480 and 7.1600

24-HOUR VIEW: “When USD was trading at 7.0930 yesterday, we indicated that ‘while USD is likely to rise today, the major resistance at 7.1200 is still unlikely to come under threat.’ We did not anticipate USD to rally sharply, as it soared to a high of 7.1430. USD closed on a strong note at 7.1363 (+0.59%). Today, we continue to expect USD strength, even though overbought conditions suggest the upside potential could be limited, and advance is likely to be at a more gradual pace. The levels to monitor are 7.1480 and 7.1600. On the downside, any pullback is likely to remain above 7.1100 with minor support at 7.1200.”

1-3 WEEKS VIEW: “Our latest narrative was from last Wednesday (09 Oct, spot at 7.0750), wherein ‘the current price movements are likely part of a range trading phase’ and ‘for the time being, USD is expected to trade between 7.0300 and 7.1200.’ After USD rose to 7.1000 two days ago, we highlighted that ‘there has been an increase in momentum, but not enough to suggest the start of a sustained advance.’ We added, ‘USD must break and remain above 7.1200 before a sustained advance is likely.’ We did not expect the sudden and strong surge that sent USD to a high of 7.1430. The price action indicates further USD strength to 7.1600, potentially 7.1900. To keep the momentum going, USD must not break below the ‘strong support’ level, now at 7.0900.”
 

The US Dollar (USD) is likely to trade with an upward bias; as upward momentum is only beginning to build, any advance is unlikely to threaten the major resistance at 7.1200. In the longer run, current price movements are likely part of a range trading phase; USD is likely to trade between 7.0300 and 7.1200, UOB Group’s FC analysts Quek Ser Leang and Lee Sue Ann note.

USD unlikely to threaten the major resistance at 7.1200

24-HOUR VIEW: “USD traded between 7.0665 and 7.0888 last Friday, narrower than our expected sideways trading range of 7.0650/7.0920. USD closed at 7.0684, but it opened on a firm note today. Upward is beginning to build, and today, USD is likely to trade with an upward bias. As momentum is only beginning to build, any advance is unlikely to threaten the major resistance at 7.1200 (there is another resistance level at 7.1040. Support levels are at 7.0780 and 7.0660.”

1-3 WEEKS VIEW: “Our latest narrative was from last Wednesday (09 Oct, spot at 7.0750), wherein ‘the current price movements are likely part of a range trading phase,’ and ‘for the time being, USD is expected to trade between 7.0300 and 7.1200.’ While there has been a slight increase in short-term upward momentum, we continue to hold the same view for now.”

The US Dollar (USD) is likely to trade in a sideways range of 7.0650/7.0920. In the longer run, current price movements are likely part of a range trading phase; USD is likely to trade between 7.0300 and 7.1200, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD/CNH can break below 7.0650 mid term

24-HOUR VIEW: “We highlighted yesterday that USD ‘could rise to 7.1060 before the risk of a pullback increases.’ Our view did not materialise as it traded sideways between 7.0685 and 7.0955. Further sideways trading seems likely today, probably in a range of 7.0650/7.0920.”

1-3 WEEKS VIEW: “Our update from Wednesday (09 Oct, spot at 7.0750) remains valid. As highlighted, the current price movements are likely part of a range trading phase. For the time being, USD is expected to trade between 7.0300 and 7.1200.”

The US Dollar (USD) could rise to 7.1060 before the risk of a pullback increases. In the longer run, current price movements are likely part of a range trading phase; USD is likely to trade between 7.0300 and 7.1200, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD can rise to 7.1060 before pulling back

24-HOUR VIEW: “We expected USD to trade in a 7.0530/7.0930 range yesterday. USD subsequently dipped to 7.0543 before rising to 7.0981. USD close at 7.0929 (+0.26%). The advance has resulted in a slight increase in momentum. Today, USD could rise to 7.1060 before the risk of a pullback increases. Support is at 7.0830, followed by 7.0700.”

1-3 WEEKS VIEW: “Our update from yesterday (09 Oct, spot at 7.0750) remains valid. As highlighted, the current price movements are likely part of a range trading phase. For the time being, USD is expected to trade between 7.0300 and 7.1200.”

The US Dollar (USD) could continue to trade in a range, likely between 7.0530 and 7.0930. In the longer run, current price movements are likely part of a range trading phase; USD is likely to trade between 7.0300 and 7.1200, UOB Group Quek Ser Leang and Peter Chia note.

USD may fall towards 7.0530

24-HOUR VIEW: “We expected USD to trade in a 7.0590/7.0800 range yesterday. While USD traded in a wider range between 7.0466 and 7.0846, it closed little changed at 7.0745 (+0.03%). There has been no increase in either upward or downward momentum, and USD could continue to trade in a range today, likely between 7.0530 and 7.0930.”

1-3 WEEKS VIEW: “After USD surged last Friday, we indicated on Monday (07 Oct, spot at 7.0900) that ‘while further USD strength is not ruled out, it remains to be seen if it can maintain the rapid pace of advance.’ We also indicated that ‘the level to monitor is 7.1200, and in order to maintain the rapid buildup of momentum, USD must not break below 7.0500.’ Yesterday (Tuesday), USD broke below 7.0500 as it dropped to a low of 7.0466. The buildup in momentum has faded. The current price movements are likely part of a range trading phase. For the time being, USD is expected to trade between 7.0300 and 7.1200.”

The US Dollar (USD) could strengthen further, but it remains to be seen if it can maintain the rapid pace of advance. The level to monitor is 7.1200, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

USD can strengthen further

24-HOUR VIEW: “Last Friday, USD surged to a high of 7.1036. Yesterday (Monday), we indicated that ‘the sharp and swift rally appears to be overdone, and USD is unlikely to rise much further.’ We expected USD to ‘trade in a range between 7.0700 and 7.1050.’ However, instead of trading in a range, USD sold off sharply to a low of 7.0583, closing at 7.0724 (-0.38%). This time around, the sharp drop appears to be overdone, and instead of continuing to decline, USD is expected to trade in a 7.0590/7.0800 range.”

1-3 WEEKS VIEW: “After USD surged last Friday, we indicated yesterday (07 Oct, spot at 7.0900) that ‘while further USD strength is not ruled out, it remains to be seen if it can maintain the rapid pace of advance.’ We also indicated that ‘the level to monitor is 7.1200, and in order to maintain the rapid buildup of momentum, USD must not break below 7.0500.’ USD subsequent pulled back sharply, and momentum has slowed to an extent. However, only a breach of 7.0500 would indicate that USD is not ready to head higher to 7.1200.”

The NDRC press conference appears to run short on details with regards to stimulus measures. USD/CNH was last at 7.0582, OCBC’s FX strategist Christopher Wong notes.

Bullish momentum on daily chart intact

“Hopes were raised but the delivery was disappointing. Post-opening rally in Chinese equities has partially fizzled out as the lack of followthrough is a setback to sentiments, and CNH-sensitive FX, including AUD, KRW, MYR.”

“Near term, USD/CNH should continue to face 2-way risks as markets digest 1/ the disappointment over the lack of details on China stimulus; 2/ monitor daily fix for a sense of how comfortable policymakers may be with RMB’s recent price action; 3/ potential return of US exceptionalism and ahead of US elections (potentially supportive of USD).”

“Bullish momentum on daily chart intact which RSI rose. Support at 7.0320 levels. Resistance at 7.11 (50 DMA).”

The US Dollar (USD) could strengthen further, but it remains to be seen if it can maintain the rapid pace of advance, UOB Group FX analysts Quek Ser Leang and Peter Chia note.  

The level to monitor is 7.1200

24-HOUR VIEW: “Last Friday, we expected USD to edge higher, but we were of the view that ‘any advance is unlikely to reach 7.0710.’ Instead of edging higher, USD surged, reaching a high of 7.1036. The sharp and swift rally appears to be overdone, and USD is unlikely to rise much further. Today, USD is more likely to trade in a range, probably between 7.0700 and 7.1050.”

1-3 WEEKS VIEW: “The level to monitor is 7.1200. Last Thursday (03 Oct, spot at 7.0380), we indicated that ‘the recent USD weakness has stabilised.’ We also indicated that ‘the current price movements are likely part of a range trading phase, probably between 6.9900 and 7.0800.’ On Friday, USD surged above 7.0800 and reached 7.1036. USD closed on a strong note, up by 0.69% (7.0991), its second biggest 1-day gain this year. While further USD strength is not ruled out, it remains to be seen if it can maintain the rapid pace of advance. The level to monitor is 7.1200. In order to maintain the rapid buildup of momentum, USD must not break below 7.0500.”

The US Dollar (USD) is expected to edge higher; any advance is unlikely to reach 7.0710. In the longer run, weakness has stabilised; current price movements are likely part of a 6.9900/7.0800 range trading phase, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Price movements are a part of a 6.9900/7.0800 range

24-HOUR VIEW: “We expected USD to continue to rise yesterday. However, we indicated that ‘any advance is unlikely to reach the resistance at 7.0600.’ USD subsequently rose to 7.0550, closing at 7.0504 (+0.20%). Despite the advance, there has been no significant increase in momentum. Today, we expect USD to edge higher, but this time around, any advance is unlikely to reach 7.0710. Support is at 7.0390, followed by 7.0220.”

1-3 WEEKS VIEW: “We highlighted yesterday (03 Oct, spot at 7.0380) that the recent USD weakness has stabilised. We also highlighted that “the current price movements are likely part of a range trading phase, probably between 6.9900 and 7.0800.” We continue to hold the same view.”

The US Dollar (USD) is likely to trade in a 7.0010/7.0350 range. In the longer run, downward momentum is beginning to slow; if USD breaches 7.0350, it would suggest that it could trade in a range for a period, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Likely to trade in a 7.0010/7.0350 range

24-HOUR VIEW: “After USD rebounded on Monday, we indicated yesterday (Tuesday) that USD could continue to rebound, but it does not appear to have enough momentum to threaten the strong resistance at 7.0350.’ In line with our expectations, USD rebounded, even though it almost broke above 7.0350 (high has been 7.0350). Despite the advance, there has been no significant increase in momentum, and instead of continuing to rise, USD is more likely to trade in a 7.0010/7.0350 range today.”

1-3 WEEKS VIEW: “After holding a negative USD stance for more than a week (as annotated in the chart below), we highlighted yesterday (01 Oct, spot at 7.0100) that “downward momentum is beginning to slow, and if USD breaches 7.0350 (‘strong resistance’ level), it would suggest that it could trade in a range for a period.” USD subsequently rose but did not break clearly above 7.0350 (high has been 7.0350). As our ‘strong resistance’ level has not been clearly breached, we will hold the same view for now, even though the likelihood of further USD weakness has diminished.”

The US Dollar (USD) could continue to rebound; there does not appear to be enough momentum for it to threaten the resistance at 7.0350. In the longer run, downward momentum is beginning to slow; if USD breaches 7.0350, it would suggest that it could trade in a range for a period, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Downward momentum is beginning to slow

24-HOUR VIEW: “We expected USD to edge lower yesterday. We were incorrect, as instead of edging lower, USD rebounded strongly to 7.0120. The strong rebound has resulted in an increase in momentum. Today, USD could continue to rebound, but it does not appear to have enough momentum to threaten the strong resistance at 7.0350. Note that there is another resistance level at 7.0240. Support is at 6.9980, a breach of 6.9850 would indicate that the current upward pressure has eased.”

1-3 WEEKS VIEW: “We have held a negative USD view for more than a week now (as annotated in the chart below). In our most recent narrative from last Friday (27 Sep, spot at 6.9810), we indicated that ‘the recent price action continues to suggest USD weakness, albeit likely at a slower pace.’ We added, ‘the levels to monitor are 6.9400 and 6.9200, and a breach of 7.0350 (‘strong resistance’ level) would mean that USD is not weakening further.’ USD has not been able to make any further headway on the downside. Downward momentum is beginning to slow, and if it breaches 7.0350 (no change in ‘strong resistance’ level), it would suggest that it could trade in a range for a period.”

USD/CNH should extend its fall below 7.00 following last week’s 0.9% decline to 6.9815. The pair was last seen at 6.9952, DBS FX analyst Philip Wee notes.

Additional fiscal measures are expected

“The CSI 300 Index surged 15.7% last week, its best weekly performance since November 2008, on China’s most significant monetary stimulus package since the Covid-19 pandemic to support the property sector and shore up capital markets.”

“Additional fiscal measures are expected as China seeks to achieve its 5% growth target. An announcement is likely before the National People’s Congress meeting in the second half of October.”

“The US Treasury Department welcomed last week’s stimulus measures but emphasized the need for increased domestic demand over reliance on exports.”

The US Dollar (USD) is likely to edge lower; any decline is not expected to reach the support at 6.9400. In the longer run, price action continues to suggest USD weakness, albeit likely at a slower pace; the levels to monitor are 6.9400 and 6.9200, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

Levels to monitor are 6.9400 and 6.9200

24-HOUR VIEW: “Last Thursday, USD plummeted and closed sharply lower. Last Friday, we indicated that ‘the outsized decline has resulted in oversold conditions, and USD is unlikely to weaken much further.’ We expected USD to ‘trade in a range between 6.9700 and 7.0100.’ USD subsequently traded in a narrower range than expected (6.9725/7.0040). Despite closing slightly higher at 6.9806 (+0.11%), the underlying tone appears to have softened. Today, we expect USD to drift lower, but any decline is unlikely to reach the support at 6.9400 (there is a minor support level at 6.9580). Resistance is at 6.9930, followed by 7.0050.”

1-3 WEEKS VIEW: “We continue to hold the same view as last Friday (27 Sep, spot at 6.9810). As indicated, the recent price action continues to suggest USD weakness, albeit likely at a slower pace. The levels to monitor are 6.9400 and 6.9200. On the upside, a breach of 7.0350 (‘strong resistance’ level was at 7.0450 last Friday) would mean that USD is not weakening further.”

CNY appreciated 0.5% overnight on China’s stimulus hopes, and CNH did better with a 1.0% again, DBS FX analyst Philip Wee notes.

Shanghai Composite Index has a best weekly rise in almost 16 years

“CNY appreciated 0.5% (CNH did better with a 1.0% again) overnight on China’s stimulus hopes.”

“Despite doubts that the stimulus would reverse China’s slowdown, the Shanghai Composite Index surged 9.7%, its best weekly rise in almost 16 years, to a three-month high of 3001.”

“Offshore USD/CNH fell from 7.10 to 6.98, closing below 7.00 for the first time since May 2023. Onshore USD/CNY lagged at 7.01.”