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USD/CNH could extend the drop to the 7.0100 region once 7.0350 gives way, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD dropped to 7.0370 before rebounding. Despite the bounce, it is too early to expect a sustained recovery. From here, USD is more likely to consolidate and trade sideways between 7.0350 and 7.0650.”

Next 1-3 weeks: “In our latest update from last Wednesday (08 Apr, spot at 7.0720), we held the view that ‘last month’s 7.1652 high could remain as a top for a while more; risk for USD has shifted to the downside towards 7.0350’. USD subsequently dropped to 7.0370 last Friday. While reaching oversold, the outlook for USD is still weak. That said, 7.0350 is a solid support and USD to close below this level before further weakness towards the next support at 7.0100 can be expected. Overall, USD has to move back above 7.0820 in order to indicate that the current downward pressure has eased.”