USD/CNH now looks to 6.8850 – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group now suggested that USD/CNH has now shifted its focus to the 6.8850 level.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘barring a move above 6.9370, USD is likely to weaken toward 6.9200, possibly as low as 6.9150’. The subsequent USD weakness exceeded our expectation by a wide margin as it dropped to an overnight low of 6.9056. The rapid decline appears to be running ahead of itself and while a drop below the overnight low of 6.9056 is not ruled out, the odds for a breach of the next support at 6.8950 are not high. Resistance is at 6.9180 followed by 6.9250.”

Next 1-3 weeks: “We noted yesterday (18 Aug. spot at 6.9315) that ‘if there is a NY closing below 6.9300, 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’. We added, ‘the prospect for the start of a negative phase is rather high unless USD moves above 6.9400 within these 1 to 2 days’. USD subsequently dropped to within a few pips of 6.9050 (overnight low of 6.9056) before ending the day on a weak note at 6.9079 (-0.36%). In other words, the price actions suggest USD has moved into a negative phase and the next level to focus on is 6.8850. On the upside, the ‘strong resistance’ level at 6.9400 remains unchanged for now.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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