The selling pressure around USD/CNH is expected to mitigate on a breakout of 6.9300, said UOB Group Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘appears to have moved into a consolidation phase and it is likely to trade between 6.8650 and 6.9050’. USD subsequently traded between 6.8722 and 6.9139 before closing slightly higher at 6.8940 (+0.16%). While the underlying tone has firmed somewhat, the price movements still appear to be consolidative. Today, we expect USD to trade in a range, likely between 6.8750 and 6.9100.”

Next 1-3 weeks: “After USD fell sharply on Monday, we highlighted on Tuesday (14 Mar, spot at 6.8600) that the ‘impulsive drop in USD is likely to continue’. However, USD has not been able to make any further headway on the downside. While the downside risk has decreased, only a break of 6.9300 (no change in ‘strong resistance’ level) would indicate that USD is not weakening further. Looking ahead, support level is at 6.8350.”