UOB Group’s FX Strategists noted the look for USD/CNH remains tilted to the downside in the near-term.
Key Quotes
24-hour view: “Yesterday, we highlighted that USD ‘is unlikely to strengthen much further’ and we expected it to ‘trade sideways between 6.3680 and 6.3880’. USD subsequently traded within a range of 6.3770/6.3910 before closing little changed at 6.3841 (+0.01%). The current movement is viewed as part of a consolidation phase and for today; USD is likely to trade within a 6.3720/6.3900 range.”
Next 1-3 weeks: “There is not much to add to our update from Tuesday (01 Jun, spot at 6.3670). As highlighted,’while the focus is at 6.3300 now, oversold conditions suggest that this level may not come into the picture so soon’. All in, only a breach of the 6.4000 (no change in ‘strong resistance’ level) would indicate that the weakness in USD that started earlier last week has run its course.”
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