In opinion of FX Strategists at UOB Group, USD/CNH stays within a negative phase and could drop to the 6.8460 region in the next weeks.
Key Quotes
24-hour view: “Our expectation for USD to ‘trade sideways’ was incorrect as it plunged to a low of 6.8579 before ending the day on a weak note at 6.8582 (-0.44%). While it is too early to expect a recovery, severely oversold conditions suggest further sustained USD weakness is unlikely. From here, USD could dip below 6.8500 but the odds for a break of the major support at 6.8460 are not high. Resistance is at 6.8670 followed by 6.8900.”
Next 1-3 weeks: “After about a week, the 6.8850 level that we first indicated last Wednesday (19 Aug, spot at 6.9120) finally came into the picture as USD plummeted to a low of 6.8801 yesterday (26 Aug). The lackluster momentum over the past several days has perked up and as indicated in recent updates, the next support level of note below 6.8850 is at 6.8460. Overall, the current negative phase in USD is deemed as intact as long as USD stays below the 6.9180 (‘strong resistance’ level was previously at 6.9400).”
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