USD/CNH: There is still room for a drop to 6.6985 – UOB
|Another probable visit to the 6.6985 level still remains in the pipeline in USD/CNH, comment UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.
Key Quotes
24-hour view: “We expected USD to ‘weaken further’ last Friday. However, after dipping to a low of 6.7226, USD rebounded strongly to 6.7720 before pulling back to close at 6.7555. The price movements are likely part of a broad consolidation range and USD is expected to trade between 6.7300 and 6.7700 today.”
Next 1-3 weeks: “Last Friday (27 Jan, spot at 6.7310), we highlighted that downward momentum is building quickly and we expect USD to weaken toward the month-to-date low near 6.6985. While there is no change in our view for now, the rebound to a high of 6.7720 has dented the downward momentum. Overall, only a breach of 6.7760 (‘strong resistance’ level) would indicate that the build-up in downward momentum has faded.”
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