USD/CNH now moved into a consolidation phase – UOB

In opinion of FX Strategists at UOB Group, USD/CNH faces the likeliness of extra consolidation in the near-term.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘could ease lower towards 6.9680’. The subsequent weakness exceeded our expectation as USD dropped to a low of 6.9630. Despite the relatively rapid decline, downward momentum has not improved by much. That said, further weakness is not ruled but for today, a breach of 6.9500 would come as a surprise. Resistance is at 6.9800 followed by 7.0000.”

Next 1-3 weeks: “USD traded in a relatively choppy manner over the past few days as it gave up most of its gains from late last week over the past couple of days. For now, we continue to hold the same form last Thursday (06 Feb, spot at 6.9780) wherein USD is expected to trade within a broad 6.9500/7.0230 range.”