UOB Group’s FX Strategists remain of the view that USD/CNH has embarked on a potential move to the 6.3230 level in the next weeks.
Key Quotes
24-hour view: “We highlighted yesterday that ‘downward momentum has not improved by much but there is room for USD to drop to 6.3270’. We added, ‘the Jan’s low near 6.3230 still appears to be unlikely to come under threat’. USD subsequently dropped to 6.3284 before rebounding to close little changed at 6.3342 (+0.02%). USD is likely in a consolidation for now and is expected to trade between 6.3290 and 6.3420 for today.”
Next 1-3 weeks: “There is no change in our view from Wednesday (16 Feb, spot at 6.3390). As highlighted, the recent consolidation phase is over and USD is likely to head lower towards 6.3230. Only a break of the ‘strong resistance’ at 6.3490 (level previously at 6.3585) would indicate that our view for USD to head to lower towards 6.3230 is wrong.”