UOB Group’s FX Strategists at UOB Group noted USD/CNH keeps the mixed outlook unchanged so far.
24-hour view: “While we noted yesterday that ‘upward momentum has more or less dissipated’, we expected USD to ‘rade sideways within a 6.4550/6.4880 range’. However, USD broke 6.4550 and dropped to a low of 6.4425. Despite the relatively sharp drop, downward momentum has not improved by much. From here, there is room for USD to move to 6.4380. The next support at 6.4250 is unlikely to come into the picture. Resistance is at 6.4600 followed by 6.4740.”
Next 1-3 weeks: “Two days ago (11 Jan, spot at 6.4850), we indicated that ‘near-term bias is tilted to the upside but odds for a rise above 6.5200 are not high’. The rapid manner by which USD cracked the ‘strong support’ at 6.4450 (overnight low of 6.4425) was not exactly expected. The outlook is mixed and from here, USD could trade between 6.4100 and 6.4900.”