USD/CNH moved into a negative phase – UOB

According to FX Strategists at UOB Group, USD/CNH has now shifted its focus to the 6.8850 level.

Key Quotes

24-hoour view: “Yesterday, USD traded between 6.9007 and 6.9141, narrower than our expected sideway-trading range of 6.8950/6.9150. The underlying tone has weakened somewhat and the bias for today is tilted to the downside. While USD could dip last week’s low of 6.8935, the next major support at 6.8850 is likely out of reach. Resistance is at 6.9100 followed by 6.9150.”

Next 1-3 weeks: “We have held the same view since last Wednesday (19 Aug, spot at 6.9120) wherein USD ‘has moved into a negative phase’ and that ‘the next level to focus on is at 6.8850’. Despite the overall negative indications, USD has not been able to make much headway on the downside as it traded in a quiet manner for the past few days. For now, we continue to hold on to the same view and only a move above 6.9400 (no change in ‘strong resistance’ level) would indicate that the downward pressure has dissipated. Looking forward, the next support level of note below 6.8850 is at 6.8460.”