USD/CNH faces a formidable support around 6.8500 – UOB

In case sellers regain control, USD/CNH is seen facing firm support around 6.8500 for the time being, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Our view for USD to weaken last Friday did not materialize as it traded sideways between 6.9090 and 6.9326 before closing little changed at 6.9214 (+0.06%). Momentum indicators are mostly flat and USD is likely to continue to trade sideways. Expected range for today; 6.9100/6.9350.”

Next 1-3 weeks: “There is no change in our view from last Friday (05 May, spot at 6.9150). As highlighted, USD could continue to weaken but short-term conditions are deeply oversold and the chance of it breaking the formidable support at 6.8500 is low for now. Overall, USD is likely to trade under pressure for now unless it can break above the ‘strong resistance’ at 6.9400 (no change in level from last Friday).”