Quek Ser Leang and Lee Sue Ann from UOB emphasize that the USD/CNH rate did not change much on Monday around 6.7652, but the fundamental tone has softened. They expect the pair to fall in the range of 6.7595-6.7690 during the day, rather than record a keen decline. Their negative assessment will continue in the coming weeks, with a possible move towards 6.7500 unless the forceful resistance at 6.7800 is broken.
A gentle tone indicates the gradual strength of the CNH
“24-HOUR VIEW: Yesterday, USD traded between 6.7627 and 6.7708, closing largely unchanged at 6.7652 (+0.01%). Despite relatively calm price developments, the underlying tone has softened. That said, this will likely lead to USD drifting in the 6.7595/6.7690 range rather than a sustained decline.”
“1-3 WEEK OUTLOOK: Following our negative USD outlook from early last week, in our previous update last Friday (May 29, price 6.7740) we emphasized that “downside momentum remains mild, but there is room for USD to decline further to 6.7620.” The USD then fell to a low of 6.7605. The downward momentum remains bland, but the decline has not stabilized. In total, only a break of the level of 6.7800 (“strong resistance”, previously at the level of 6.7900) would indicate stabilization of the decline. Until then, the USD may continue to fall. The next level to watch is 6.7500.”
(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)
