FX Strategists at UOB Group suggested that a deeper move in USD/CNH appears not favoured in the near term at least.
Key Quotes
24-hour view: “USD traded between 6.3480 and 6.3613 yesterday before closing at 6.3500 (-0.15%). The weakened underlying tone suggests USD could drift lower but the major support at 6.3390 is unlikely to come under threat (minor support is at 6.3430). Resistance is at 6.3570 followed by 6.3610.”
Next 1-3 weeks: “Our latest narrative from Monday (17 Jan, spot at 6.3610) still stands. As highlighted, the odds for further USD weakness are not high. However, only a breach of 6.3710 (no change in ‘strong resistance’ level) would indicate that the downside risk has dissipated. Looking ahead, any decline in USD is expected to encounter solid support at 6.3390 and 6.3300.”