FX Strategists at UOB Group see a probable move to 6.5200 if USD/CNH stays below 6.5500 in the next weeks.
Key Quotes
24-hour view: “We expected USD to ‘consolidate and trade between 6.5500 and 6.5900’ last Friday. USD subsequently traded between 6.5505 and 6.5795 before closing on a soft note at 6.5513. Downward momentum is beginning to improve and the bias for today is tilted to the downside. That said, last week’s low at 6.5319 could be just out of reach for now. Resistance is at 6.5600 followed by 5.5740.”
Next 1-3 weeks: “We have held a negative view in USD for about 2 weeks now. In our latest narrative from Wednesday (18 Nov, spot at 6.5560), we indicated that USD ‘is likely to weaken to further to 6.5200’. USD subsequently dropped to 6.5319 before staging a relatively robust recovery. Downward momentum has waned and unless USD can move and stay below 6.5500 within these 1 to 2 days, the prospect for a move to 6.5200 would diminish quickly. Conversely, a break of 6.6000 (no change in ‘strong resistance’ level) would indicate that the weak phase in USD has run its course.”
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