USD/CNH: Sustained weakness lies below 6.9300 – UOB

Pablo Piovano FXStreet

USD/CNH faces extra losses on a breach of the 6.9300 area in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to weaken yesterday but held the view that ‘a break of last week’s low at 6.9280 is unlikely’. USD subsequently dropped to 6.9305 before closing at 6.9326 (-0.10%). Downward momentum has improved further as USD took out 6.9280 after opening this morning and the risk for today, remains on the downside. From here, barring a move above 6.9370, USD is likely to weaken towards 6.9200, possibly a slow 6.9150.”

Next 1-3 weeks: “We have held the same view since last Thursday (13 Aug, spot at 6.9315) wherein ‘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’. USD closed just above 6.9300 yesterday (6.9326, -0.10%) and the prospect for the start of a negative phase is rather high unless USD moves above 6.9400 within these 1 to 2 days.”

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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