USD/CNH: Upside momentum looks dented – UOB

FX Strategists at UOB Group noted USD/CNH could lose upside momentum on a break below 6.6750.

Key Quotes

24-hour view: “USD traded between 6.6840 and 6.7023 yesterday, narrower than our expected sideway-trading range of 6.6800/6.7100. The quiet price action offers no fresh clues and USD could continue to trade sideways. Expected range for today, 6.6800/6.7050.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (29 Oct, spot at 6.7225) wherein ‘upward momentum has improved and if USD were to break 6.7450, the next level to focus on is at 6.7650’. We indicated that USD ‘is expected to trade with an upward bias as long as it does not move below 6.6750’. However, USD did not break 6.7450 but came close to taking out the ‘strong support’ level at 6.6750 (low of 6.6770 on Friday). The surprisingly soft price actions have dented the momentum but only a break of 6.6750 would indicate that the upside risk has dissipated. Meanwhile, USD has to move and stay above 6.7150 within these 1 to 2 days or the odds for a break of 6.7450 would diminish quickly.”