FX Strategists at UOB Group see the constructive bias in USD/CNH unchanged while above 6.4200.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the underlying tone still appears to be soft and we continue to see chance for USD to drift lower to 6.4400’. USD subsequently dipped to 6.4411 before rebounding to close at 6.4486 (-0.20%). Downward momentum has improved a tad and this could lead to USD edging lower to 6.4350. A sustained decline below this level is unlikely. On the upside, a break of 6.4700 (minor resistance is at 6.4600) would indicate the current downward pressure has eased.”
Next 1-3 weeks: “We have held a positive view in USD for about a week now. In our latest narrative from Tuesday (23 Feb, spot at 6.4600), we noted ‘shorter-term momentum has waned but outlook for USD remains positive as long as 6.4200 is intact’. Since then, USD has not been able to make much headway on the upside and upward momentum has deteriorated further. In order to rejuvenate the flagging momentum, USD has to move and stay above 6.4700 within these 1 to 2 days or a break of 6.4200 (no change in ‘strong support’ level) would indicate that the current positive phase has come to an end.”
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