USD/CNH is likely to drop further and visit the 6.5200 level in the next weeks, according to FX Strategists at UOB Group.
24-hour view: “USD closed on a weak note (6.5702, -0.35%) and extended its decline this morning. Strong downward momentum suggests further weakness is likely even though last week’s low at 6.5475 could be just out of reach. Resistance is at 6.5750 followed by 6.5880.”
Next 1-3 weeks: “We have held a negative view in USD since earlier this month. After USD rebounded strongly from 6.5475, we indicated last Wednesday (11 Nov, spot at 6.6030) that ‘odds for further USD have diminished’. We added, ‘however, only a break of 6.6600 would indicate the current downward pressure has eased’. After trading in a quiet manner for several days, USD lurched lower and closed on a weak note yesterday (16 Nov). The rapid improvement in shorter-term momentum suggests that a break of 6.5475 would not be surprising. The next support is at 6.5200 followed by a major level at 6.4960. On the upside, the ‘strong resistance’ level has moved lower to 6.6250 from 6.6600.”