USD/CNH remains under pressure and could drop to 6.6750 – UOB

USD/CNH could extend the downtrend further and revisit the 6.6750 level in the next few weeks, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘could drop below the Jan’s low of 6.6980’. Our view was incorrect as USD rebounded to a high of 6.7442. The rapid rebound appears to be running ahead of itself and USD is unlikely to advance much further. Today, USD is more likely to trade sideways between 6.7200 and 6.7500.”

Next 1-3 weeks: “We highlighted yesterday (02 Feb, spot at 6.7120) that the rapid increase in downward momentum is likely to lead to USD dropping below last month’s low near 6.6980. There is no change in our view. However, a breach of 6.7550 (no change in ‘strong resistance’ level) would invalidate our view.”