USD/CNH faces scarce chances to break below the key support around 6.8500 for the time being, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Yesterday, USD traded in a range of 6.8966/6.9279 before closing largely unchanged. Despite the relatively quiet price action, the underlying tone appears to be soft. We see room for USD to weaken but a sustained decline below 6.8900 is unlikely. Resistance is at 6.9220, followed by 6.9280.”

Next 1-3 weeks: “Our latest narrative was from Tuesday (02 May, spot at 6.9580) wherein ‘while upward momentum has improved, USD has to break and stay above the major resistance at 6.9650 before a move to 7.0000 is likely’. However, USD did not break 6.9650 and instead, it fell sharply over the past few days. USD could continue to weaken but short-term conditions are deeply oversold the chance of it breaking the formidable support at 6.8500 is low for now. Overall, USD is likely to trade under pressure for now unless it can break above the ‘strong resistance’ level, currently at 6.9400.”