USD/CNH risks a deeper pullback if 6.4400 is breached in the next weeks, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our expectation for USD to ‘test 6.4350’ was incorrect as it rebounded from 6.4434 to an overnight high of 6.4790. The movement is viewed as part of a consolidation phase. For today, USD is likely to trade sideways, expected to be between 6.4580 and 6.4820.”
Next 1-3 weeks: “Last Friday (29 Jan, spot at 6.4750), we highlighted that further USD strength is unlikely. We added, USD ‘is more likely to trade sideways within a broad range 6.4400/6.5500’. USD subsequently dropped to a low of 6.4397. Downward momentum is beginning to improve but USD has to close below 6.4400 before a move towards 6.4130 can be expected. At this stage, the prospect for such a move is not high but it would remain intact as long as it does not move above 6.4900.”
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