Chinese Yuan: Bullish bias with focus on 6.7000 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann maintain a negative stance on USD/CNH, noting a softened underlying tone even as recent price action stayed relatively quiet. Intraday, they see scope for a modest drift lower while keeping 6.7150 as key support. Over the next 1–3 weeks, a sustained break below 6.7200 would open the way toward 6.7000, provided resistance at 6.7340 holds.

Soft tone with key support in view

"24-HOUR VIEW: While we indicated yesterday that “the bias for USD is tilted to the downside,” we highlighted that “any decline is likely part of a lower range of 6.7150/6.7240.” However, USD traded between 6.7181 and 6.7255 before closing marginally higher by 0.01% at 6.7220. Despite the relatively quiet price action, the underlying tone appears to have softened. Today, USD could edge lower, but the 6.7150 support is unlikely to come under threat. Resistance is at 6.7240, followed by 6.7280."

"1-3 WEEKS VIEW: We have held a negative USD view since early this month (as annotated in the chart below). Last Friday (21 Aug, spot at 6.7240), we highlighted that “downward momentum continues to increase, and looking ahead, if USD breaks and holds below 6.7200, the next level to watch is 6.7000.” While USD dipped below 6.7200, it did not close below this level. For the time being, we will continue to hold the same view as long as 6.7340 (no change in ‘strong resistance’) is not breached."

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