UOB Group’s FX Strategists noted USD/CNH faces extra consolidation in the near term, likely between 6.3450 and 6.4000.

Key Quotes

24-hour view: “Our expectations for USD to ‘advance to 6.4000’ did not materialize as it traded between 6.3798 and 6.3931 before closing little changed at 6.3840 (-0.09%). The underlying tone has softened and the bias is on the downside. However, any weakness is unlikely to break 6.3700. Resistance is at 6.3850 followed by 6.3900.”

Next 1-3 weeks: “Yesterday (24 Mar, spot at 6.3890), we highlighted that the bias for USD on the upside but the chance for a clear break of 6.4105 is not high. We added, “a breach of the ‘strong support’ level at 6.3730 would indicate that the build-up in momentum has fizzled out”. While our ‘strong support’ level is not breached, the build-up is momentum has fizzled out. In other words, USD is not ready to head higher and is likely to trade between 6.3450 and 6.4000 for now.”