USD/CNH could debilitate to 6.9300 – UOB
USD/CNH could extend the downside to the 6.9300 region in the next weeks, comment Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
Key Quotes
24-hour view: “We did not anticipate the choppy price actions in USD last Friday as it swung between 7.0050 and 7.0719 before closing at 7.0220 (0.24%). USD fell sharply in early Asian trade and further decline is likely. That said, the pace of any further decline is likely to be slower and the major support level of 6.9600 could be out of reach today. Resistance is at 7.0250, followed by 7.0480.”
Next 1-3 weeks: “We turned negative on USD last Thursday (01 Dec, spot at 7.0400). We indicated ‘the recent outsized drop is likely to extend to 7.0200, possibly as low as 7.0000’. USD easily took out both support levels as it plummeted to 7.0050 on Friday and 7.0000 in Asian trade today. We continue to expect USD weakness. The next levels to watch are at 6.9600 and 6.9300. On the upside, a break of 7.0810 (‘strong resistance’ was at 7.1250 last Friday) would indicate that the weakness in USD has stabilized.”