USD/CNH has now likely moved into a consolidative phase between 6.3050 and 6.3450, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We did not anticipate the surge in volatility as USD soared to 6.3445 before plummeting quickly to end the day little changed at 6.3237 (-0.04%). The sharp drop from the high appears to have room to extend but any weakness is unlikely to challenge the major support at 6.3130 (minor support at 6.3180). Resistance is at 6.3300 followed by 6.3370.”

Next 1-3 weeks: “We have expected USD to head lower since the middle of last week. After USD dropped to 6.3180, we highlighted on Monday (21 Feb, spot at 6.3245) that downward momentum has not improved by much but USD could weaken to 6.3130. Yesterday (22 Feb), USD soared above our ‘strong resistance’ level of 6.3390 (high of 6.3445) before plunging back down. While downward momentum has more or less dissipated, USD could edge lower but only a clear break of 6.3050 would indicate that it is ready to head lower in a sustained manner. To look it another way, USD is likely to trade between 6.3050 and 6.3450 for now.”