In light of the recent price action, USD/CNH could extend the decline to the 7.0200 region in the short term, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “The sharp plunge in USD yesterday came as a surprise (we were expecting sideways trading). The decline appears to be overdone but USD could test the 7.0200 first before the risk of rebound increases. The next support at 7.0000 is unlikely to come under threat today. Resistance is at 7.0800, followed by 7.1000.”

Next 1-3 weeks: “USD fell sharply the second straight day. The outsized drop is likely to extend to 7.0200, as low as 7.0000. The downside risk is intact as long USD does not move above 7.1450.”