UOB’s Quek Ser Leang and Lee Sue Ann highlight that USD/CNH was little changed on Monday around 6.7652, but the underlying tone has softened. They expect the pair to drift lower intraday within 6.7595–6.7690 rather than stage a sharp decline. Over coming weeks, their negative view persists, with scope for a move toward 6.7500 unless 6.7800 strong resistance is breached.

Soft tone points to gradual CNH strength

"24-HOUR VIEW: Yesterday, USD traded between 6.7627 and 6.7708, closing largely unchanged at 6.7652 (+0.01%). Despite the relatively quiet price action, the underlying tone has softened. That said, this is likely to lead to USD drifting lower within a range of 6.7595/6.7690 rather than a sustained decline."

"1-3 WEEKS VIEW: Tracking our negative USD view from early last week, in our previous update from last Friday (29 May, spot at 6.7740), we highlighted that “downward momentum remains mild, but there is room for USD to decline further to 6.7620.” USD subsequently edged to a low of 6.7605. Downward momentum remains mild, but the decline has not stabilised. Overall, only a breach of 6.7800 (‘strong resistance’ previously at 6.7900) would indicate that the decline has stabilised. Until then, USD could continue to edge lower. The next level to watch is 6.7500."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)