USD/CNH could extend the downtrend and retest the 6.3130 level in the near term, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade between 6.3290 and 6.3420’ last Friday was incorrect as it plummeted to 6.3180 before rebounding quickly to trade mostly sideways. Downward momentum has not improved by much but there is scope for USD to dip below 6.3180. For today, the next support at 6.3130 is unlikely to come under threat. Resistance is at 6.3295 followed by 6.3350.”

Next 1-3 weeks: “In our latest narrative from last Wednesday (16 Feb, spot at 6.3390), we highlighted that USD is likely to head lower towards 6.3230. Our view was not wrong as USD dropped to 6.3180 on Friday (18 Feb). Downward momentum has improved, albeit not by much. That said, USD could weaken to 6.3130. A clear break of this level could potentially lead to further weakness to the round-number support of 6.3000. The downside risk is intact as long as USD does not move above 6.3390 (‘strong resistance’ level previously at 6.3490).”