USD/CNH still faces a probable move to 6.9500 – UOB

In opinion of FX Strategists at UOB Group, USD/CNH still risks a probable decline to the 6.9500 level in the short-term horizon.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the current movement is still viewed as a consolidation phase and USD is likely to trade between 6.9870 and 7.0040’. USD subsequently traded within a lower and narrower range than expected (between 6.9825 and 6.9993). Downward momentum has improved a tad and for today, USD could drift lower to 6.9760. In view of the lackluster momentum, the next support at 6.9650 is unlikely to come into the picture. Resistance is at 6.9930 followed by 7.0000.”

Next 1-3 weeks: “There is not much to add to our update from Monday (13 Jul, spot at 7.0050). As highlighted, USD could weaken to 6.9650 with lower odds for extension to 6.9500. Only a break of 7.0180 (‘strong resistance’ level previously at 7.0390) would indicate that the current downward pressure has eased.”