FX Strategists at UOB Group noted USD/CNH‘s negative phase is seen ending above 6.4900.
Key Quotes
24-hour view: “Last Friday, we expected USD to ‘move lower to 6.4550 first before a recovery can be expected’. Our expectation did not materialize as USD rebounded from 6.4617 (high has been 6.4745). The current movement is viewed as part of a consolidation phase and USD is likely to trade between 6.4650 and 6.4800 for today.”
Next 1-3 weeks: “We have held a negative view in USD since mid-April. In our latest narrative from last Thursday (29 Apr, spot at 6.4650), we highlighted that ‘boost in downward momentum could lead to further USD weakness towards 6.4410’. However, USD has not been able to make much headway to the downside and downward momentum is beginning to wane. From here, a break of 6.4900 (no change in ‘strong resistance’ level) would indicate that the negative phase has ended.”
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