Chinese Yuan: Upside bias toward 6.7600 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that USD/CNH downside momentum continues to build after the pair slipped to 6.7653. Intraday, there is a chance of testing major support at 6.7600 while staying below 6.7780. On a 1–3 week horizon, the Dollar is expected to trade with a downside bias toward 6.7600, provided strong resistance at 6.7820 caps the upside.

Increasing pressure on key support zone

"24-HOUR VIEW: After USD dropped to a low of 6.7695 on Wednesday, we highlighted the following yesterday: “The rapid increase in momentum suggests further USD weakness, even though the major support at 6.7600 is likely out of reach (there is another support level at 6.7660). On the upside, a breach of 6.7800 (minor resistance is at 6.7760) would indicate that the decline is stabilising.” Our view was not wrong, as USD subsequently rose to 6.7781 and then fell to a low of 6.7653. Downward momentum continues to increase, and today, there is a chance for USD to test 6.7600. To keep the momentum going, USD must hold below 6.7780 (minor resistance is at 6.7720)."

"1-3 WEEKS VIEW: We turned slightly negative on USD yesterday (15 Jul, spot at 6.7720). We highlighted that “downward momentum is increasing, and USD is likely to trade with a downside bias toward 6.7600.” We will continue to hold the same view as long as 6.7820 (‘strong resistance’ level was at 6.7860 yesterday) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)