USD/CNH keeps the mixed outlook intact – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted USD/CNH could still trade between 6.3450 and 6.3850 in the next weeks.

Key Quotes

24-hour view: “We highlighted that ‘there is scope for USD to move to 6.3900 but a clear break of this level is unlikely’. USD subsequently rose to 6.3870 before staging a surprisingly sharp drop (low has been 6.3580). Downward momentum has improved, albeit not by much. USD could dip to 6.3550 but a sustained decline below this level is unlikely (next support is at 6.3450). Resistance is at 6.3700 followed by 6.3750.”

Next 1-3 weeks: “Yesterday (06 Apr, spot at 6.3800), we highlighted that upward momentum is beginning to improve and a clear break of 6.3900 suggests USD could advance to 6.4000. We added, ‘a breach of the strong support at 6.3630 would indicate that the build-up in momentum has eased’. USD subsequently rose to 6.3870 before dropping sharply to 6.3580. The breach of our ‘strong support’ at 6.3630 indicates that the build-up in momentum has fizzled out. From here, the outlook is mixed and USD could trade within a range of 6.3450/6.3850.”