Chinese Yuan: Upside risk below 6.6900 against US Dollar – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann describe USD/CNH as softening within a 6.6900–6.7000 range, with scope for a dip below 6.6900 while major support at 6.6800 should hold. On a 1–3 week view, a close below 6.6900 could trigger a move toward 6.6800. Over 1–3 months, they expect the pair to edge lower below the cloud.

Dollar bias tilts slightly lower

"24-HOUR VIEW: When USD was at 6.6950 yesterday, we indicated that “the current price movements are likely part of a range-trading phase between 6.6900 and 6.7000.” USD then traded within a range of 6.6900/6.6984. Despite the relatively quiet price action, the underlying tone has softened somewhat. Today, USD could dip below 6.6900 but it is currently unclear whether it can maintain a foothold below this level. Nevertheless, the next major support at 6.6800 is unlikely to come under threat. On the upside, resistance is at 6.6990."

"1-3 WEEKS VIEW: We highlighted two days ago (12 Oct, spot at 6.6940) that “if USD breaks and closes below 6.6900, it may lead to a move toward 6.6800.” We will continue to hold the same view as long as USD holds below 6.7050 (no change in ‘strong resistance’ level)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)