USD/CNH: The 7.04 level now emerges on the horizon – UOB

Unless USD/CNH could move above 7.1210, another visit to the 7.04 zone should remain on the cards, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to ‘trade between 7.0600 and 7.1000’ yesterday. Instead of trading sideways, USD dropped to a low of 7.0546. The decline lacks momentum and further USD is unlikely for today. From here, USD could edge higher but any advance is unlikely to move above 7.0850. Support is at 7.0550 followed by 7.0500.”

Next 1-3 weeks: “Our latest narrative was from last Wednesday (03 Jun, spot at 7.1050) wherein ‘a daily closing below 7.0850 could signal the start of a deeper decline in USD’USD plummeted last Friday (05 Jun) and closed on a weak note at 7.0685. While oversold shorter-term conditions could lead to a couple of days of consolidation first, barring a move above 7.1210 (‘strong resistance’ level), USD could weaken further to 7.0400 in the coming days.”