USD/CNH still looks to a move to 6.9500 – UOB

FX Strategists at UOB Group noted USD/CNH remains under downside pressure and could recede to the 6.9500 region in the next weeks.

Key Quotes

24-hour view: “We highlighted last Friday that ‘downward pressure has dissipated and the current movement is viewed as part of a consolidation phase’ and expected USD to ‘trade within a 6.9880/7.0080 range’. USD subsequently traded within a narrower range than expected (between 6.9893 and 7.0030). The current movement is still viewed as a consolidation phase and USD is likely to trade between 6.9870 and 7.0040 for today.”

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.”