CNY: Bullish Bias, Eyeing 6.7000 per USD Level – UOB

UOB foreign exchange strategists Quek Ser Leang and Lee Sue Ann noted in their latest analysis that the underlying tone for USD/CNH has turned softer, and despite relatively quiet recent price action, they maintain a bearish stance. As of now, USD/CNH is trading near 6.7175, and the analysts expect the exchange rate to edge lower during the day.

**Short-Term Momentum Leans Downside**

The strategists emphasized that from an intraday trading perspective, USD/CNH has room for further declines. They view the 6.7150 level as a key support, and if this position is decisively broken, it could open the door for a deeper pullback. This assessment aligns with the broader market sentiment favoring a stronger yuan, as offshore yuan had previously surged past the 6.79 mark, hitting a cyclical high.

**Key Support and Resistance Levels**

On a longer timeframe, UOB's earlier analytical framework had viewed 6.7900 as strong support, but the recent exchange rate has clearly broken below that level, signaling the end of the prior uptrend. Market reports indicate that to resume the upward trend, the dollar would need to break above the key technical resistance near 6.8430. Under the current weaker tone, any rebound could face selling pressure.

**Market Background and Institutional Views**

The recent strength of the yuan is anchored in China's economic fundamentals. According to Huatai Securities' interpretation, geopolitical shocks have weighed on the dollar, raising expectations for yuan appreciation. However, industry institutions generally believe that while the yuan has upward momentum, the scope for a sharp, one-sided appreciation in the future is limited, and the overall trend will continue to be one of steady, gradual fluctuations.