Chinese Yuan: Gradual gains toward 6.6640 against US Dollar – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note USD/CNH is drifting lower, with intraday risks skewed toward a brief dip below 6.6700, though they do not expect a sustained break. Over the next one to three weeks they see scope for a gradual move toward 6.6640 as long as the pair stays below strong resistance at 6.6850. Their 1–3 month view keeps a broader downside bias while USD/CNH trades below the cloud near 6.7815.

Offshore Yuan retains mild strengthening bias

"24-HOUR VIEW: We indicated yesterday that USD “could dip below 6.6720 and test 6.6700.” However, we pointed out that “a continued decline below 6.6700 is unlikely.” We noted that “resistance is at 6.6805.” Our view did not materialise, as USD rose to 6.6795, and then dropped back down to close largely unchanged at 6.6750 (+0.01%). The slight increase in downward momentum suggests USD could dip below 6.6700 today. Based on the prevailing momentum, a sustained decline below this level is unlikely. On the upside, resistance is at 6.6780."

"1-3 WEEKS VIEW: Our update from yesterday (21 Oct, spot at 6.6750) still stands. As highlighted, “as long as USD holds below 6.6850 (‘strong resistance’ level), it could decline gradually toward 6.6640.” A breach of the ‘strong resistance’ would indicate that the downward pressure from early last week has faded."

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