USD/CNH expected to challenge 6.3300 in the near term – UOB

According to FX Strategists at UOB Group, the prospects for USD/CNH to break below 6.3300 seems to have increased as of late.

Key Quotes

24-hour view: “Last Friday, we highlighted that USD ‘could edge higher but any advance is unlikely to break 6.3610’. Instead of edging higher, USD dipped to a low of 6.3380. Downward momentum has improved somewhat and the risk is tilted to the downside. That said, any weakness is expected to encounter solid support at 6.3300. Resistance is at 6.3445 followed by 6.3520.”

Next 1-3 weeks: “In our latest narrative from Monday (17 Jan, spot at 6.3610), we highlighted that odds for further USD weakness are not high. We added, only a breach of 6.3710 (‘strong resistance’ level) would indicate that the downside risk has dissipated. On Friday, USD dropped to a low of 6.3380 and downward momentum is beginning to perk up and the chance for USD to break the major support at 6.3300 has increased.  Looking ahead, the next support is at 6.3180. On the upside, the ‘strong resistance’ level has moved lower to 6.3650 from 6.3710.”