USD/CNH to test the 6.46 support zone – Standard Chartered

Economists at Standard Chartered believe the USD/CNH pair has further scope to fall, with levels around 6.46 offering the next major technical support.

Key quotes

“USD/CNH continues to track lower from its May peak around 7.200 and has some further scope to fall, in our view. We expect significant technical support around the 6.450-6.470 region could be tested soon, but that this level may hold as the pair treads water awaiting the incoming Biden administration.” 

“Recent comments from Biden suggest that nothing much will change for US-China relations initially, and we anticipate stability would be a preferred approach from the PBoC.”

“We expect initial resistance around 6.680 in the event of a broad USD corrective bounce. A break below strong support at 6.450 would open an extension to 6.380.”