USD/CNH faces the next support at 6.5300 – UOB

USD/CNH keeps the negative outlook and faces strong support in the 6.5300 level according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to weaken yesterday but we were of the view that ‘any decline could be limited to a test of the support at 6.5600’. However, USD dropped to 6.5475 before making a dramatic turnaround as it rocketed to an overnight high of 6.6495. The sharp and rapid rise appears to be running ahead of itself and further sustained USD is unlikely for today. USD is more likely to consolidate and trade between 6.5700 and 6.6400.”

Next 1-3 weeks: “We highlighted last Friday (06 Nov, spot at 6.6150) that ‘USD is still on the defensive but 6.5800 may not come into the picture so soon’. The subsequent pace of weakness exceeded our expectation as USD plummeted to 6.5860 before extending is decline this morning. The outlook for USD still appears weak and the next support is at 6.5300. On the upside, a break of 6.6600 (‘strong resistance’ was at 6.6900 last Friday) would indicate that the current downward pressure has eased.”