USD/CNH still risks a corrective downside – UOB

FX Strategists at UOB Group Quek Ser Leang and Peter Chia see USD/CNH facing a tough support around the 6.5940 level in the near term.

Key Quotes

24-hour view: “Last Friday, we held the view that ‘further USD weakness is not ruled but the major support at 6.5940 is likely out of reach for now’. USD did not threaten the 6.5940 support as it dropped to 6.6170 before snapping back up to end the day little changed at 6.6558 (+0.02%). Downward pressure has dissipated and the current movement is likely part of a consolidation phase. For today, USD is likely to trade between 6.6320 and 6.6720.”

Next 1-3 weeks: “There is no change in our view from last Friday (03 Jun, spot at 6.6350). As highlighted, the risk for USD is on the downside but any further weakness could be limited to a test of the next solid support at 6.5940. Overall, USD is expected to trade on its back-foot unless it can move above 6.6850 (no change in ‘strong resistance’ level from last Friday).”