UOB Group’s FX Strategists see extra losses in USD/CNH picking up pace if 6.4240 is cleared.
24-hour view: “We did not expect the sharp sell-off that sent USD plunging to 6.4250. While already oversold, the weakness in USD has not stabilized. From here, USD could retest the 6.4240 level before stabilization can be expected. For today, a sustained decline below 6.4240 appears unlikely. Resistance is at 6.4420 followed by 6.4480.”
Next 1-3 weeks: “We have held the same view since last Wednesday (06 Oct, spot at 6.4500) where USD is likely to trade between 6.4240 and 6.4800 for a period of time. After trading in a choppy manner for several days, USD plummeted to 6.4250 yesterday (13 Oct). Downward momentum is beginning to build but USD has to close below 6.4240 before a sustained decline can be expected (next support is at 6.4100). The chance for USD to close below 6.4240 is quite high as long as it does not move above the ‘strong resistance’ level (currently at 6.4540) within these few days.”