USD/CNH: Consolidation phase looks over – UOB

USD/CNH could now likely embark on a mover lower to the 6.3230 level in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘could weaken further even though Jan’s low near 6.3230 is unlikely to come under threat’. We added, ‘there is another support at 6.3300’. USD subsequently dropped to 6.3308. Downward momentum has not improved by much but there is room for USD to drop to 6.3270. The Jan’s low near 6.3230 still appears to be unlikely to come under threat. Resistance is at 6.3365 followed by 6.3430.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (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’ level, currently at 6.3585 would indicate that that our view for a lower USD is wrong. On a shorter-term note, 6.3490 is already quite a strong resistance level.”