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UOB Group’s FX Strategists noted USD/CNH could grind lower to the 7.1150 region in the next weeks.

Key Quotes

24-hour view: “Our expectation for USD to ‘extend lower towards 7.1150’ did not materialize as it only touched 7.1234. The underlying tone still appears to be soft and we continue to see chance for a dip to 7.1150 first before a more sustained recovery can be expected. Resistance is at 7.1400 followed by 7.1500.”

Next 1-3 weeks: “The sudden sharp sell-off in USD last Friday took out our ‘strong support’ level at 7.1400. The break of the ‘strong support’ indicates that the positive phase in USD that started on Thursday (28 May, spot at 7.1800) ended much sooner than expected. The sharp but short-lived advance has resulted is a mixed outlook. From here, USD could trade sideways between 7.0950 and 7.1750 for a period.”