Further upside in USD/CNH is likely to meet firm resistance at 6.4650 ahead of 6.4800, comment FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we noted that ‘momentum indicators are mostly neutral’ and we expected USD to ‘consolidate and trade between 6.4300 and 6.4500’. While our expectation for consolidation was correct, USD traded within a narrower range than expected (6.4386/4.4496). Momentum indicators are still neutral and USD could continue to consolidate. Expected range for today, 6.4300/6.4500.”
Next 1-3 weeks: “USD dropped sharply to 6.4039 early last week before rebounding strongly. Despite the relatively sharp bounce, upward momentum has not improved by much. From here, USD could edge higher but any advance is likely limited to a test of 6.4650. There is another strong resistance at 6.4800. On the downside, a breach of 6.4200 (‘strong support’ level) would indicate that the current mild upward pressure has eased.”