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FX Strategists at UOB Group believe USD/CNH is poised for further downside in the next weeks.

Key Quotes

24-hour view: “Our expectation for USD to ‘edge higher to 6.7600’ did not quite materialize as it traded in a quiet manner between 6.7276 and 6.7544. The underlying tone has weakened somewhat but while USD could edge lower but Monday’s (05 Oct) low of 6.7135 could be just out of reach (minor support is at 6.7200). Resistance is at 6.7450 but the stronger level is at 6.7550.”

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.”