The downside bias in USD/CNH seems over for the time being, say FX Strategists at UOB Group Quek Ser Leang and Peter Chia.
Key Quotes
24-hour view: “USD traded between 6.7302 and 6.7452 last Friday before closing at 6.7353 (-0.13%). USD soared during early Asian hours and upward momentum is beginning to build. Further advance would not be surprising but a break of the strong resistance at 6.7650 is unlikely. Support is at 6.7370 followed by 6.7300.”
Next 1-3 weeks: “Last Thursday (11 Aug, spot at 6.7290), we highlighted that the rapid build-up in downward momentum suggests USD could weaken further to 6.7100. Since then, USD has not been able to make much headway on the downside. Shorter-term downward has waned and the chance for USD to weaken to 6.7100 has diminished. That said, only a break of 6.7650 (no change in ‘strong resistance’ level from last Friday) would indicate that USD is unlikely to weaken further.”