Further downside could drag USD/CNH to the 6.3530 region in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the decline in USD could extend to 6.3660 first before stabilizing’. We did not expect the rapid decline that sent USD to a low of 6.3563. USD could weaken further but any decline is expected to encounter solid support at 6.3530. Resistance is at 6.3660 followed by 6.3710.”

Next 1-3 weeks: “Yesterday (30 Mar, spot at 6.3760), we highlighted that USD is likely to trade between 6.3530 and 6.4000. We did not anticipate the sharp and rapid drop to 6.3563. Downward momentum has improved and USD is likely to trade with a downward bias towards 6.3530, possibly 6.3450.On the upside, a breach of the ‘strong resistance’ (level currently at 6.3770 would indicate that the current downward pressure has eased.”