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USD/CNH carries the potential to debilitate to the 6.7165 level in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD plunged to a low of 6.7302 in a holiday thinned market. The sharp and rapid drop appears to be ‘overdone’ and further sustained weakness in USD is unlikely for today. USD is more likely to consolidate and is expected to trade within yesterday’s broad range of 6.7302/6.7900.”

Next 1-3 weeks: “The sharp drop in USD that sent it to a fresh 17-month low (6.7302) came as a surprise. While the longer-term outlook for USD still appears weak, the sharp decline over the past couple of days appears to be running ahead of itself. That said, USD is expected to stay under pressure unless it can move above 6.8250 (‘strong resistance’ level). Overall, while USD could weaken further, the major support at 6.7165 could be out of reach this time round.”