Chinese Yuan: Further gains toward 6.7000 against US Dollar – UOB

UOB analysts Quek Ser Leang and Lee Sue Ann note that the USD/CNH rate slipped to 6.7166 and closed slightly lower, indicating a gradual buildup of short-term downside momentum. They have maintained a negative view on the US dollar against the Chinese yuan since early August, with 6.7000 now identified as the next level to watch if 6.7200 is breached. A resistance band is established at 6.7210, followed by 6.7250.

While acknowledging that the USD could edge lower, the analysts maintain that the 6.7150 support is unlikely to be threatened. They anticipate that USD might dip below 6.7150, but any further decline is unlikely to reach 6.7100. Resistance is expected to be at 6.7210, followed by 6.7250.

Looking ahead over the next one to three weeks, the analysts have held a negative view on the US dollar since early this month. They highlighted on Friday that "downward momentum continues to increase" and warned that if USD breaks and holds below 6.7200, the next level to watch would be 6.7000. Yesterday, USD closed at 6.7169 (-0.08%).

The price action suggests a further decline is possible, with 6.7000 identified as the key level to monitor. This view will be maintained as long as USD stays below 6.7300, previously considered strong resistance.