If USD/CNH breaks above the 6.3710 level, the downside pressure is forecast to alleviate, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘there is room for the rebound in USD to extend but any advance is unlikely to break the strong resistance at 6.3710’. USD subsequently rose to 6.3650 before dropping sharply. Upward pressure has eased and USD is likely to trade sideways for today, expected to be within a range of 6.3430/6.3600.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Jan, spot at 6.3610). As highlighted, downward momentum has waned quickly and the odds for further USD weakness are not high. However, only a breach of 6.3710 (no change in ‘strong resistance’ level) would indicate that the downside risk has dissipated. Looking ahead, any decline in USD is expected to encounter solid support at 6.3390 and