Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note further downside in USD/CNH should meet a tough contention area around 6.8500.

Key Quotes

24-hour view: “We highlighted yesterday that ‘we continue to expect USD to trade sideways, likely between 6.9150 and 6.9350’. USD traded sideways as expected, albeit in a narrower range than expected (6.9218/6.9340). USD could continue to trade sideways, likely in a range of 6.9180/6.9350.”

Next 1-3 weeks: “There is no change in our view from last Friday (05 May, spot at 6.9150). As highlighted, USD could continue to weaken but short-term conditions are deeply oversold and the chance of it breaking the formidable support at 6.8500 is low for now. Overall, USD is likely to trade under pressure for now unless it can break above the ‘strong resistance’ at 6.9400 (no change in level from last Friday).”