According to FX Strategists at UOB Group, the consolidative mood in USD/CNH is predicted to remain unchanged in the next weeks.
Key Quotes
24-hour view: “We expected USD to strengthen last Friday but we were of the view that ‘any advance is unlikely to challenge the major resistance at 6.4900’. USD subsequently rose to 6.4877 before dropping sharply to 6.4584 during NY hours. While the rapid decline has room to extend lower, any weakness is unlikely to threaten the support at 6.4480 (6.4550 is already quite a strong level). Resistance is at 6.4680 followed by 6.4850.”
Next 1-3 weeks: “Our latest narrative was from Monday (01 Feb, spot at 6.4500) where we indicated that ‘downward momentum is beginning to improve but USD has to close below 6.4400 before a move towards 6.4130 can be expected’. USD subsequently traded in a relatively quiet manner. The mild downward pressure has dissipated and USD is likely to trade sideways from here, expected to be between 6.4400 and 6.5200.”
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