Ella 
205
Yesterday, we expected USD/CNH to trade sideways between 7.2800-7.3300. USD/CNH then traded within a tighter range of 7.2827/7.3075. The fundamental tone has softened, with USD/CNH likely to trade lower. However, any decline below 7.2680 is unlikely to be significant. Initial resistance is at 7.2920, then at 7.3050.
Next 1-3 weeks outlook: We have held the same view since Monday (Aug 21, when prices were at 7.3100) that USD/CNH could consolidate for a few days before breaking out of last week’s high of 7.3490. While USD/CNH has consolidated over the past few days, there is no sign of a break above 7.3490. Upward momentum has faded, with USD/CNH more likely to trade between 7.2500/7.3300 for the time being than a break above 7.3490.
