USD/CNH: Further weakness is seen below 7.0350 – UOB

FX Strategists at UOB Group believe USD/CNH could grind lower and reach the 7.0100 level if 7.0350 is cleared.

Key Quotes

24-hour view: “USD traded between 7.0429 and 7.0673 yesterday, a wider range than our expected 7.0460/7.0650. The price action is still viewed as an on-going consolidation phase. In other words, USD is likely to continue to trade sideways for now. Expected range for today; 7.0350/7.0650.”

Next 1-3 weeks: “In our latest update from last Wednesday (08 Apr, spot at 7.0720), we held the view that ‘last month’s 7.1652 high could remain as a top for a while more; risk for USD has shifted to the downside towards 7.0350’. USD subsequently dropped to 7.0370 last Friday. While reaching oversold, the outlook for USD is still weak. That said, 7.0350 is a solid support and USD has to close below this level before further weakness towards the next support at 7.0100 can be expected. Overall, USD has to move back above 7.0820 in order to indicate that the current downward pressure has eased.”