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Further downside in USD/CNH looks likely in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘drift lower to 6.4450’ did not materialize as it traded in a quiet manner between 6.4554 and 6.4675. Momentum indicators are mostly neutral and further sideway-trading appears likely. Expected range for today, 6.4500/6.4750.”

Next 1-3 weeks: “There is not much to add to our update from Monday (01 Feb, spot at 6.4500). As highlighted, downward momentum is beginning to improve but USD has to close below 6.4400 before a move towards 6.4130 can be expected. The prospect for such a move has increased and would continue to increase as long as USD does not move above 6.4900 (no change in ‘strong resistance’ level). Looking ahead, the support below 6.4400 is at 6.4130.”