The continuation of the downward bias in USD/CNH should meet tough contention around 6.8000 for the time being.

Key Quotes

24-hour view: “Yesterday, USD dropped to 6.8108 in Asian trade before rebounding to trade sideways for the rest of the sessions. USD appears to have moved into a consolidation phase and it is likely to trade in a range of 6.8150 and 6.8500 today.”

Next 1-3 weeks: “We have expected a weaker USD for more than a week. As USD struggled to extend its weakness, in our most recent narrative from 21 Mar (spot at 6.8800), we stated that USD ‘has to break and stay below 6.8550 in the next couple of days or it is unlikely to weaken further’. USD dropped below 6.8550 on Wednesday (22 Mar) and yesterday, it dropped further to 6.8108. While the price actions suggest USD could weaken further, any decline is expected to face strong support at 6.8000. The downside risk is intact as long as it stays below 6.8710 (‘strong resistance’ level previously at 6.9100).”