Chinese Yuan: Further gains toward 6.7000 against US Dollar – UOB

FXStreet Insights Team FXStreet

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report USD/CNH slipped to 6.7166 and closed slightly lower, with short-term downside momentum gradually building. They have held a negative Dollar view against CNH since early August and now flag 6.7000 as the next level to watch if 6.7200 gives way, while keeping a clear resistance band that would invalidate the bearish scenario.

Negative stance with clear targets

"24-HOUR VIEW: While we indicated yesterday that USD “could edge lower,” we held the view that “the 6.7150 support is unlikely to come under threat.” We were not wrong, as USD declined to a low of 6.7166. Downward momentum is increasing, but not significantly. Today, USD could dip below 6.7150, but based on the prevailing momentum, any further decline is unlikely to reach 6.7100. Resistance is at 6.7210, followed by 6.7250."

"1-3 WEEKS VIEW: We have held a negative USD view since early this month. Last Friday (21 Aug, spot at 6.7240), we highlighted that “downward momentum continues to increase, and looking ahead, if USD breaks and holds below 6.7200, the next level to watch is 6.7000.” Yesterday, USD closed at 6.7169 (-0.08%). The price action suggests USD could decline further, and the level to watch is 6.7000. We will maintain this view as long as USD holds below 6.7300 (‘strong resistance’ previously at 6.7300)."

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