USD/CNH now faces a mixed outlook – UOB

UOB Group’s FX Strategists noted the mixed outlook for USD/CNH in the near term.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade sideways’ were incorrect as it plummeted to 6.4750 before closing on a soft note at 6.4762 (-0.34%). While oversold, the rapid decline could test 6.4730 first before the risk of a rebound would increase. Resistance is at 6.4850 followed by 6.4910.”

Next 1-3 weeks: “Last Friday (20 Aug, spot at 6.4985), we indicated that USD ‘is ready to head higher’. Our view was proven wrong quickly as USD plummeted yesterday and easily took out our ‘strong support’ at 6.4800 (low of 6.4750). The recent choppy price actions have resulted in a mixed outlook. From here, USD could trade between 6.4600 and 6.5050 for a period of time.”