USD/CNH seen on the defensive for the time being – UOB

According to FX Strategists at UOB Group, USD/CNH faces a strong resistance in the 6.7746 level.

Key Quotes

24-hour view: “USD surged to 6.7746 and then nosedived to 6.6183. The 1563 pips range is the largest 1-day range since 2015. The sharp drop from the high appears to be overdone but a dip below the 6.6183 low is not ruled out. That said, the next major support at 6.6030 is unlikely to come into the picture. Resistance is at 6.6700 followed by 6.7050.”

Next 1-3 weeks: “Yesterday, we highlighted that the ‘near-term outlook is unclear but for now, USD is likely to stay within October’s range of 6.6275/6.7900’. Our view was proven wrong quickly as USD plummeted to 6.6183 before closing at 6.6200 (-0.79%). The weak daily closing suggests further USD weakness is likely even though the major support at 6.6030 may not be easy to crack. All in, USD is likely to stay on the defensive with yesterday’s high of 6.7746 acting as a solid resistance.”