USD/CNH could move lower and test the 6.7000 level in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected USD to ‘edge lower’ yesterday. However, USD traded in a relatively quiet manner between 6.7255 and 6.7478. USD opened on a soft note this morning and the bias still appears to be tilted to the downside. That said, a sustained decline below Monday’s (05 Oct) low of 6.7135 appears unlikely (next support is at 6.7000). Overall, USD is deemed to be under mild downward pressure unless it can move above 6.7500 (minor resistance is at 6.7380).”
Next 1-3 weeks: “There is not much to add to our latest narrative from Tuesday (06 Oct, spot at 6.7250). As highlighted, further USD weakness is likely and the focus now is at the round-number support level of 6.7000. That said, shorter-term momentum appears to be a bit ‘hesitant’ and 6.7000 may not come into the picture so soon. On the upside, a break of 6.7700 (no change in ‘strong resistance’ level) would indicate that the current downward pressure has eased.”
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