USD/CNH: Shrinking odds for a move lower – UOB

Extra losses in USD/CNH looks unlikely in the near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further consolidation in USD would not be surprising, likely between 6.5830 and 6.6300’. Our view was not wrong as USD traded between 6.5829 and 6.6290. The price actions offer no fresh clues and USD is likely to continue to consolidate for now. Expected range for today, 6.5900/6.6350.”

Next 1-3 weeks: “In our latest narrative from Monday (09 Nov, spot at 6.5830), we indicated that ‘the outlook for USD is still weak and the next support is at 6.5300’. USD subsequently dropped to 6.5476 before snapping back up. Downward momentum has eased considerably and the odds for further USD weakness have diminished. However, only a break of 6.6600 (no change in ‘strong resistance’ level) would indicate that the current downward pressure has eased.”