FX Strategists at UOB Group noted the negative stance of USD/CNH, adding a potential move to the 6.8460 level in the next weeks.
Key Quotes
24-hour view: “Yesterday, we held the view that USD ‘could dip below last week’s low at 6.8935 but the next support at 6.8850 is likely out of reach’. The subsequent weakness exceeded our expectation as USD plummeted to a low of 6.8801 before extending its decline this morning. Further weakness is not ruled out but oversold conditions suggest a more moderate pace of decline and the next support at 6.8650 may not come into the picture (minor support is at 6.8730). Resistance is at 6.8890 followed by 6.8980.”
Next 1-3 weeks: “After about a week, the 6.8850 level that we first indicated last Wednesday (19 Aug, spot at 6.9120) finally came into the picture as USD plummeted to a low of 6.8801 yesterday (26 Aug). The lackluster momentum over the past several days has perked up and as indicated in recent updates, the next support level of note below 6.8850 is at 6.8460. Overall, the current negative phase in USD is deemed as intact as long as USD stays below the 6.9180 (‘strong resistance’ level was previously at 6.9400).”
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