UOB Group’s FX Strategists noted that USD/CNH could re-visit 6.4300 on a close below 6.4500 in the near term.
24-hour view: “The sharp and rapid in USD to 6.4508 came as a surprise. The rapid drop appears to be overdone and USD is unlikely to weaken further. For today, USD is more likely to consolidate and trade within a 6.4500/6.4750 range.”
Next 1-3 weeks: “We have held the same view since Monday (12 Jul, spot at 6.4810) where USD is likely to trade within a 6.4600/6.5000 range for a period of time. After trading in a quiet manner for a couple of days, USD lurched lower yesterday (14 Jul) and plummeted to 6.4508. Downward momentum is beginning to build and a daily closing below 6.4500 would indicate that USD could head lower towards 6.4300. On the upside, a break of 6.4850 (‘strong resistance’ level) would indicate that the downside risk has dissipated.”
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