FX Strategists at UOB Group noted USD/CNH could bounce off recent lows and re-test the 6.4500 area in the next weeks.
Key Quotes
24-hour view: “We highlighted yesterday that USD ‘could dip below 6.4000 but the prospect for extension to 6.3900 is not high’. However, USD rebounded strongly after touching 6.4010. While the sharp rebound appears to be overdone, there is room for USD to test the strong resistance at 6.4400. For today, a sustained advance above this level is unlikely. Support is at 6.4200 followed by 6.4080.”
Next 1-3 weeks: “We have expected USD to weaken since early last week. In our latest narrative from yesterday (16 Feb, spot at 6.4050), we highlighted that ‘a break of 6.4000 would shift the focus towards the next support at 6.3800’. USD subsequently dropped to 6.4010 before staging a sudden and sharp rebound. While our ‘strong resistance’ level at 6.4400 is still intact, the rapid loss in momentum suggests that 6.4000 could remain intact for now. The current rebound could extend higher but any advance is likely limited to a test of 6.4500. On the downside, 6.4000 is acting as a very strong support now (minor support is at 6.4080).”
Share
