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UOB Group’s FX Strategists reiterated the outlook for USD/CNH still remains tilted to the negative side in the near-term.

Key Quotes

24-hour view: “Our expectation for USD to ‘test 6.5400’ did not quite materialize as it traded in a relatively quiet manner between 6.5414 and 6.5582. Downward momentum has improved somewhat and a dip below 6.5400 would not be surprising. For today, the next support at 6.5300 is unlikely to come into the picture. Minor support is at 6.5350. Resistance is at 6.5480 followed by 6.5550.”

Next 1-3 weeks: “We highlighted yesterday (13 Apr, spot at 6.5500) that USD ‘is in a consolidation and is expected to trade between 6.5400 and 6.5800 for now’. We added, ‘shorter-term downward momentum has improved somewhat but USD has to close below 6.5400 before a more sustained decline can be expected’. USD is approaching 6.5400 and a daily closing below this level could lead to weakness towards 6.5300. Overall, USD is deemed under mild downward pressure as long as it does not move above 6.5630.”

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