USD/CNH now looks to a test of 6.8000 – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang see USD/CNH advancing further with the next target at 6.8000 in the short-term.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade in a choppy manner between 6.7130 and 6.7430’ turned out to be incorrect as USD surged to high of 6.7910 before pulling back sharply. Despite the pullback, upward momentum still appears to be firm and USD could retest the 6.7900 level. For today, the chance for USD to move to the major resistance at 6.8000 is not high. Support is at 6.7460 followed by 6.7330.”

Next 1-3 weeks: “We turned positive USD on Tuesday (12 Jul, spot at 6.7255). On Wednesday (13 Jul, spot at 6.7400), we highlighted that USD could consolidate for 1 to 2 days first before moving higher to 6.7700. Yesterday (14 Jul), USD surged past 6.7700 and rose to 6.7910 before pulling back. The improved upward momentum suggests that USD is likely to advance further. The next level to monitor is at 6.8000. Overall, the positive outlook for USD is intact as long as it does not move below 6.7190 (‘strong support’ level was at 6.7050 yesterday). Looking ahead, if USD breaks above 6.8000, it would increase the risk of a move towards the May’s high near 6.8390.”