Further downside is not ruled out in USD/CNH – UOB

USD/CNH risks a potential decline to the 6.9500 area in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to weaken yesterday was incorrect as it rebounded after touching a low of 6.9815. Downward pressure has dissipated and the current movement is viewed as part of a consolidation phase. For today, USD is expected to trade within a 6.9880/7.0080 range.”

Next 1-3 weeks: “There is not much to add to our update from Monday (13 Jul, spot at 7.0050). As highlighted, USD could weaken to 6.9650 with lower odds for extension to 6.9500. Only a break of 7.0180 (‘strong resistance’ level previously at 7.0390) would indicate that the current downward pressure has eased.”