USD/CNH is seen breaking below 6.5000

According to FX Strategists at UOB Group, USD/CNH is anticipated to drop similarly and retest the 6.4960 degree in the subsequent weeks.

Key Quotes
24-hour view: “We highlighted the day past that ‘oversold stipulations advise similarly USD weak spot is unlikely’ and we predicted USD to ‘consolidate and change between 6.5120 and 6.5350’. Our view was once no longer incorrect as USD traded inside a 6.5122/6.5355 range. Momentum warning signs are broadly speaking impartial and in addition consolidation would now not be surprising. Expected vary for today, 6.5100/6.5330.”

Next 1-3 weeks: “We mentioned ultimate Wednesday that ‘downward momentum is enhancing however USD has to shut beneath the year-to-date low of 6.5319 in order to point out that subsequent down-leg has started’. USD plummeted to a low of 6.5070 final Friday earlier than closing at 6.5170 (-0.29%). While oversold shorter-term stipulations ought to lead to a couple of days of consolidation first, USD is anticipated to weaken to 6.4960. Looking forward, the subsequent assist is at 6.4700. All in, the modern-day susceptible section is deemed as intact as lengthy as USD does no longer cross above 6.5650 (‘strong resistance’ level).”

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