Extra strength in USD/CNH carries the potential to break above the 6.7400 level in the next weeks, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “Yesterday, we expected USD to ‘consolidate between 6.6800 and 6.7100’. Instead of consolidating, USD popped to a high of 6.7243 before pulling back. Despite the pullback, the underlying tone is positive and we see room for USD to rise to 6.7270. The major resistance at 6.7400 is unlikely to come into the picture. Support is at 6.7060 followed by 6.7000.”
Next 1-3 weeks: “We have expected USD to trade between 6.6600 and 6.7400 for more than 2 weeks now. While there is no change in our view, shorter-term upward momentum is beginning to build and the risk of a break of 6.7400 has increased. The upside risk would remain intact as long as USD does not move below the ‘strong support’ level, currently at 6.6850. Looking ahead, the next resistance above 6.7400 is at 6.7600.”
