Extra losses in USD/CNH are likely following a breach of the 6.3000 level in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘indicators are mostly neutral and USD is likely to trade sideways between 6.3150 and 6.3250’. USD subsequently traded within a wider range than expected (6.3112/6.3310) before closing largely unchanged at 6.3223 (+0.02%). While upward momentum has barely improved, USD could edge higher to 6.3380. The next resistance at 6.3450 is unlikely to come under threat. On the downside, a breach of 6.3140 would indicate that the current mild upward pressure has eased.”
Next 1-3 weeks: “There is not much to add to our update from Tuesday (01 Mar, spot at 6.3100). As highlighted, the underlying tone has softened but USD has to close below 6.3000 before a sustained decline is likely. The chance for USD to close below 6.3000 is not high for now but it would remain intact as long as USD does not move above 6.3450.”