United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH is trading with a soft underlying tone, with scope for the Dollar to test support levels near 6.7420 in the short term, while a sustained break lower is seen as unlikely.
Over the 1–3 week horizon, they still expect gradual downside toward 6.7300, provided resistance at 6.7640 holds
On a 1–3 month view, they see tentative upward momentum that would require a break above the 21‑week EMA at 6.8430 to confirm a sustained recovery. Short-term tests, gradual downside bias “24-HOUR VIEW: While we indicated yesterday that USD “could test last week’s low, near 6.7420,” we held the view that “a continued decline below this level is unlikely.” Our view did materialise as USD traded within a tight range of 6.7450/6.7500, closing largely unchanged at 6.7482 (+0.01%). Despite the quiet price action, the underlying tone appears to be soft, and there is a chance for USD to test 6.7420.
However, a continued decline below this level still appears unlikely. On the upside, resistance is at 6.7550.” “1-3 WEEKS VIEW: In our most recent narrative from Monday (03 Aug, spot at 6.7490), we highlighted that while USD edged lower last week, “there has been no clear increase in downward momentum.” However, we were of the view that USD “could continue to edge lower toward 6.7300 as long as 6.7640 (‘strong resistance’ level) is not breached.” Our view remains unchanged.” Author