USD/CNH: Further downside lies on a close below 6.3000 – UOB

USD/CNH risks a deeper pullback once 6.3000 is cleared according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for USD to ‘test the resistance at 6.3350’ did not materialize as it traded within a range of 6.3072/6.3275 before closing largely unchanged at 6.3133 (+0.04%). The underlying tone has softened somewhat and USD could dip below 6.3050 but a clear break of 6.3000 is unlikely. On the upside, a breach of 6.3200 would indicate the current mild downward pressure has eased.”

Next 1-3 weeks: “Our latest narrative was from last Friday (25 Feb, spot at 6.3185) where USD is likely to trade between 6.3050 and 6.3450. The underlying tone has softened but USD has to close below 6.3000 before a sustained decline is likely. The chance for USD to close below 6.3000 is not high for now but it would remain intact as long as USD does not move above 6.3450 within these few days.”