USD/CNH Under Mild Downward Pressure, But 7.1600 Floor Expected to Hold – UOB

USD/CNH Faces Limited Downside; Support at 7.1600 Intact

Short-Term Outlook: Mild Weakness, But No Breakdown Expected

According to UOB Group analysts, the US Dollar (USD) continues to show slight weakness against the Chinese Yuan (CNH). The pair dipped as low as 7.1701, breaking below previous support at 7.1800, but the momentum appears limited.

💬 “Further downside is possible, but an immediate break below 7.1600 is unlikely due to oversold short-term conditions,” UOB noted in its daily update.

Upside resistance now lies at 7.1810, with a stronger cap at 7.1900. A move above that would suggest current bearish sentiment has faded.

1–3 Week View: Range-Bound With Bearish Tilt

UOB maintains a cautiously bearish medium-term outlook, forecasting a slow grind lower:

• Support: 7.1600 (critical), 7.1400 (stretch target)
• Resistance: 7.1810 (minor), 7.1960 (reversal point)
• Neutral Zone: Between 7.1800–7.1960

Unless USD/CNH falls below 7.1600 convincingly, the longer-term range appears intact. Any decisive rebound above 7.1960 would nullify the downside scenario.

Related Market Context

This forecast comes amid broad US Dollar weakness triggered by poor US data releases, alongside soft Chinese economic indicators such as the recent Caixin Manufacturing PMI contraction.

Related: China PMI Slips Again in May – Signals Fragile Recovery

Key Takeaways

• USD/CNH remains under mild downward pressure.
• Immediate support at 7.1600 is expected to hold.
• 7.1400 is possible, but only with stronger bearish follow-through.
• Break above 7.1960 would suggest weakness has ended.