USD/CNH remains focused on the 6.9645 level – UOB

USD/CNH risks further losses on a break below the 6.9645 level in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘dip below 6.9755’ did not materialize as it traded in a quiet manner between 6.9765 and 6.9931. The underlying tone still appears to be soft and we continue to see chance for USD to dip below 69755. For today, the next support at 6.9645 is unlikely to come into the picture. Resistance is at 6.9880 followed by 6.9950.”

Next 1-3 weeks: “In our latest update from last Tuesday (28 Jul, spot at 6.9900), we highlighted that ‘breach of 6.9750 would indicate end of correction phase and increase risk of USD moving below the month-to-date low of 6.9645’. Since then, USD has traded mostly sideways and downward momentum has barely improved. That said, looking forward, the downside risk still appears to be higher but USD has to crack and close below the July’s low of 6.9645 before a sustained weakness can be expected.”