FX Strategists at UOB Group see USD/CNH consolidating in the near-term ahead of a potential move to the 6.4960 level in the next weeks.
Key Quotes
24-hour view: “USD dropped to a low of 6.5070 last Friday before rebounding. Oversold conditions suggest further USD weakness is unlikely for today. USD is more likely to consolidate and trade between 6.5120 and 6.5350.”
Next 1-3 weeks: “We noted last Wednesday that ‘downward momentum is improving but USD has to close below the year-to-date low of 6.5319 in order to indicate that next down-leg has started’. USD plummeted to a low of 6.5070 last Friday before closing at 6.5170 (-0.29%). While oversold shorter-term conditions could lead to a couple of days of consolidation first, USD is expected to weaken to 6.4960. Looking forward, the next support is at 6.4700. All in, the current weak phase is deemed as intact as long as USD does not move above 6.5650 (‘strong resistance’ level).”
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