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In opinion of FX Strategists at UOB Group, USD/CNH could attempt a move to the 6.9645 level in the next weeks.

Key Quotes

24-hour view: “Our expectation for USD to ‘weaken towards 6.9750’ yesterday was incorrect as it rebounded after touching 6.9865. Momentum indicators are mostly neutral now and for today, USD is likely to trade sideways between 6.9930 and 7.0140.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (23 Jul, spot at 7.0155) wherein USD ‘is in a corrective rebound but any advance is expected to face solid resistance at 7.0400’. USD subsequently popped to a high of 7.0301 but has since eased off. For now, there is no change in our view but the underlying tone has softened and from here, a break of 6.9750 would indicate that the correction phase has ended. To look at it another way, a breach of 6.9750 would increase the risk of USD moving below the month-to-date low at 6.9645. For now, the prospect for such a move is not high but it would continue to increase as long as USD does not move above 7.0300 within these few days.”