FX Strategists at UOB Group believe USD/CNH remains poised to extend the downside in the near-term.
Key Quotes
24-hour view: “We highlighted yesterday that USD ‘could decline but prospect for a break of last week’s low at 6.9815 is not high’. USD subsequently dropped to a low of 6.9820 before closing on a soft note at 6.9820 (-0.43%). Downward momentum has improved slightly and from here, USD could weaken to 6.9740. The next support at 6.9650 is unlikely to come into the picture. Resistance is at 6.9930 but the stronger level is close to 6.9980.”
Next 1-3 weeks: “There is not much to add to our update from Monday (13 Jul, spot at 7.0050). As highlighted, USD could weaken to 6.9650 with lower odds for extension to 6.9500. Only a break of 7.0180 (‘strong resistance’ level previously at 7.0390) would indicate that the current downward pressure has eased.”
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