FX Strategists at UOB Group noted the upside bias in USD/CNH could lose momentum if 6.6750 is cleared in the next weeks.
Key Quotes
24-hour view: “Last Friday, USD dropped to a low of 6.6770 before trading mostly sideways and ended the day slightly lower at 6.6983 (-0.14%). Indicators are showing mixed signals and for today, USD is likely to trade sideways, expected to be within a 6.6800/6.7100 range.”
Next 1-3 weeks: “Our latest narrative was from last Thursday (29 Oct, spot at 6.7225) wherein ‘upward momentum has improved and if USD were to break 6.7450, the next level to focus on is at 6.7650’. We indicated that USD ‘is expected to trade with an upward bias as long as it does not move below 6.6750’. However, USD did not break 6.7450 but came close to taking out the ‘strong support’ level at 6.6750 (low of 6.6770 on Friday). The surprisingly soft price actions have dented the momentum but only a break of 6.6750 would indicate that the upside risk has dissipated. Meanwhile, USD has to move and stay above 6.7150 within these 1 to 2 days or the odds for a break of 6.7450 would diminish quickly.”
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