USD/CNH: Door open to a test of 6.7100 – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang hint at the possibility that USD/CNH could drop to 6.7100 in the short term.

Key Quotes

24-hour view: “Yesterday, USD dropped sharply to 6.7163 before rebounding to close at 6.7235 (-0.45%). The rebound amidst oversold conditions suggests USD is unlikely to weaken further. For today, USD is more likely to trade between 6.7200 and 6.7500.”

Next 1-3 weeks: “Our latest narrative was from last Wednesday (03 Aug, spot at 6.7750) where USD is likely to trade between 6.7350 and 6.8000. Yesterday (10 Aug), USD cracked the support at 6.7350 and plummeted to a low of 6.7163. The rapid build-up in downward momentum suggests USD could weaken further to 6.7100. Only a break of 6.7650 (‘strong resistance’ level) would indicate that USD is unlikely to weaken further.”