The outlook for USD/CNH remains tilted to the constructive side for the time being, suggested FX Strategists at UOB Group.
24-hour view: “We expected USD to ‘trade sideways between 6.4400 and 6.4700’ yesterday. USD subsequently traded between 6.4496 and 6.4760. The underlying tone has softened and USD could drift lower but is unlikely to threaten the support at 6.4400 (6.4500 is already quite a strong level). Resistance is at 6.4680 followed by 6.4760.”
Next 1-3 weeks: “One week ago on 17 Feb (spot at 6.4285), we held the view ‘the current rebound in USD could extend to 6.4500’. As USD advances, we noted in our latest narrative from last Friday (19 Feb, spot at 6.4580) that ‘outlook for USD is still positive’ and ‘the next resistance level of note is at 6.4920’. USD rose to 6.4760 yesterday before easing off. Shorter-term momentum has waned somewhat but there is no change in our view for now. Only a break of 6.4200 (no change in ‘strong support’ level) would indicate that 6.4920 is out of reach this time round.”