China RMB: Range-Bound Consolidation Against Dollar Ahead — UOB

USD/CNH momentum has weakened after an earlier rebound, with the spot rate trading around 6.7258 and showing a low-level consolidation pattern. UOB analysts Ho Ziliang and Li Xiuen noted that the pair's upward trend has temporarily faded, with the market expected to shift into range-bound consolidation in the near term.

**Intraday Plunge Followed by Rebound, Downside Momentum Limited**

According to market reports, USD/CNH briefly broke below the 6.7900 support level during Wednesday's session, hitting a low of 6.7865, before recovering to close at 6.7911, down 0.14% on the day. UOB analysts said the intraday rebound, combined with oversold signals, suggests limited further downside for the dollar. Based on this, the bank revised its previously bullish stance, confirming that the dollar's strength phase has been interrupted.

**Short- and Medium-Term Trading Ranges Defined**

For intraday and multi-week movements, UOB provided clear expectations. The bank expects USD/CNH to remain confined to a narrow range of 6.7860 to 6.7990 during Thursday's trading. Looking ahead one to three weeks, a broader trading range could fall between 6.7750 and 6.8080. The report emphasized that to regain upward momentum, the dollar must break and hold above the upper bound of this medium-term range to be technically viable.

**External Factors Intertwine, RMB Stable but Poised for Change**

On a broader macro level, market participants noted that with the recent U.S. announcement of expanded sanctions on Iran, coupled with a generally weaker dollar, the RMB exchange rate has maintained relative stability. Some foreign bank traders believe the RMB retains potential for steady appreciation, though the pace would be controlled. The onshore RMB closed at 6.7204 last Friday, with the weekly move nearly flat, confirming the cautious tug-of-war between bulls and bears. Looking further out, Standard Chartered has significantly raised its RMB appreciation forecast, expecting it to reach 6.65 by end-2026, with a more aggressive long-term target, though this does not affect the current technical consolidation pattern.