According to FX Strategists at UOB Group, USD / CNH could intensify the decline if the 7.0850 is erased in the coming weeks.
24-hour view: “The USD was trading between 7.0890 and 7.1274 yesterday, higher than our expected consolidation range of 7.0850 / 7.1250. The move is still seen as an ongoing consolidation phase, although the slightly firmer underlying tone suggests a higher trading range of 7.1100 / 7.1350. “
1-3 weeks later: “The pace and extent of the decline from last week’s 7.1966 high was a surprise. For now, we continue to believe that the USD is trading sideways, but if the USD moves closer to 7.0850, this could signal the start of a deeper decline in the USD. At this point, the prospect of such a decision is not that high, but it would increase unless the USD can exceed 7.1500 in those few days. “