Considering the recent price action, USD/CNH could drop further and probably revisit the 7.0300 region in the near term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “USD plunged to a low of 7.0592 in Asian trade last Friday before trading sideways for the rest of the sessions. While downward momentum has waned, there is a chance for USD to drop to 7.0450 before the risk of a rebound increases. The major support at 7.0300 is unlikely to come into view today. Resistance is at 7.1000, followed by 7.1225.”

Next 1-3 weeks: “The sharp sell-off in USD last week was accompanied by strong downward momentum. Further USD weakness appears likely and the levels to monitor are at 7.0300, followed by Oct’s low near 7.0130. Resistance is at 7.1225 but only a break of the ‘strong resistance’ at 7.1660 would indicate the weakness in USD has stabilized.”