USD/CNH risks a deeper pullback below 6.9300 – UOB
|According to FX Strategists at UOB Group, USD/CNH faces further downside pressure if 6.9300 is breached.
Key Quotes
24-hour view: “Our expectation for USD to ‘move higher’ last Friday did not materialize as it traded in a quiet manner between 6.9396 and 6.9526 before closing at the low of 6.9396 (-0.14%). The soft price action upon opening this morning suggests the bias is tilted to the downside. That said, in view of the lackluster momentum, a break of last week’s low at 6.9280 is unlikely. Resistance is at 6.9470 but only a move above 6.9530 would indicate the current mild downward pressure has eased.”
Next 1-3 weeks: “On Tuesday (11 Aug, spot at 6.9620), we highlighted that ‘while USD could still weaken further out, for the next 1 to 2 weeks, USD is likely to consolidate and trade sideways within a 6.9300/6.9800 range’. USD is currently holding just above 6.9300 and if there is a NY closing below this relatively strong support level, it would indicate the start of a period of sustained weakness in USD that could lead to a move to 6.9050, possibly even to 6.8850. At this stage, the odds for such a scenario are quite high and only a move back above 6.9700 within these few days would indicate that USD is still trading in a consolidation phase.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.