USD/CNH faces a tough barrier at the 6.9300 level – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, USD/CNH is expected to meet a solid up barrier at the 6.9300 level in the near term.

Key Quotes

24-hour view: “Yesterday, we highlighted that USD could continue to advance but we indicated, ‘overbought conditions suggest a break of 6.8800 is unlikely’. Our view was not wrong as USD rose to 6.8800. USD traded on a firm note in early Asian trade and edged above 6.8800. Further USD gains are likely but the next major resistance at 6.9000 may be out of reach today. Support is at 6.8650, a breach of 6.8570 would indicate that USD is not advancing further.

Next 1-3 weeks: “We highlighted yesterday that ‘the outlook for USD is still positive’. We added, ‘a break of 6.8800 will shift the focus to 6.9000’. USD edged above 6.8800 in early Asian trade. Not surprisingly, the outlook for USD remains positive and the focus now is at 6.9000. Looking ahead, the next major level above 6.9000 is at 6.9300. Overall, only a break of 6.8360 (‘strong support’ level was at 6.8250 yesterday) would indicate that the USD strength that started earlier this month has come to an end.”