If USD/CNH close above 6.6850 it would be indicative that the downside pressure could be over, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the current movement is likely part of a consolidation phase’ and we expected USD to ‘trade between 6.6320 and 6.6720’. USD subsequently traded within a narrower range than expected (6.6373/6.6642) before closing largely unchanged at 6.6577 (+0.03%). Further consolidation appears likely even though the slightly firmed underlying tone suggests a higher range of 6.6420/6.6770.”
Next 1-3 weeks: “Last Friday (03 Jun, spot at 6.6350), we held the view that the risk for USD is on the downside but any weakness could be limited to a test of 6.5940. Since then, USD has not been able to make much headway on the downside. Downward momentum is beginning to wane and a break of 6.5850 (no change in ‘strong resistance’ level) would indicate that the downside risk has dissipated.”