Usdcnh To Trade Sideways

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Usdcnh To Trade Sideways

Usd/Cnh To Trade Sideways Between 7.2790 - 7.2960

According to an FX analyst from the UBO Group, the USD/CNH is highly likely to trade sideways in the short term. The USD/CNH pair will likely trade in a range that starts from 2.2790 and ends at 7.2960.

In the past 24 hours, the US Dollar was expected to edge higher, but that didn't materialize. Instead, the USD/CNH continued to trade in the range (7.2856 to 7.2974). By the end of the day, USD/CNH closed near 7.2884 with a -0.12% change for the day.

Usd/Cnh Stuck In A Trading Range

Given the price action of the last 24 hours, the USD/CNH is expected to trade sideways as long as it stays inside the trading range. Once the USD/CNH breaks out of the range, we will some the emergence of a new trend.

For the next 1 to 3 weeks, UBO Group forecasts a trading level of 7.2870 for the USD/CNH. According to them, the recent price action of the USD/CNH shows that the next trading range will be between 7.2600 - and 7.3100.

Recently, the Public Bank of China surprised the markets with a cut to the interest rate. On the surface, it may appear as a part of policy normalization. However, it represents the numerous headwinds faced by the Chinese economy.

Given the scale of the challenges faced by the Chinese economy, the recent rate cut wouldn't be enough to support the economy. The recently announced fiscal package at the 3rd plenum also failed to impress the markets as it was not sufficient.

Amidst all of this, the CNH is highly likely to stay on the defensive against the US Dollar. However, not all is good for the US dollar, and the US Central Bank is also mulling over starting its rate-cutting cycle in September.

With both of these central banks adopting a dovish approach, it makes sense for the USD/CNH to stay bullish. But even then, the upside is likely to remain capped due to the Dollar's weakness.

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