There is still the chance that USD/CNH could slip back to the 6.3525 level in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “Yesterday, we highlighted that ‘downward pressure has eased and USD is likely to trade sideways between 6.3730 and 6.3910’. Our view for sideway-trading was not wrong even though USD traded within a narrower range than expected (6.3755/6.3852). The quiet price actions indicate further sideway-trading is likely. Expected range for today, 6.3700/6.3900.”
Next 1-3 weeks: “After the outsized sell-off in USD, we highlighted last Wednesday (20 Oct, spot at 6.3780) that while the sell-off appears to be overdone, there is scope for USD to drop to May’s low near 6.3525. There is no change in our view for now. The downside risk is intact as long as USD does not move above the ‘strong resistance’ level at 6.4200 (no change in level).”
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