USD/CNH: Upward momentum has improved – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang see the upside bias in USD/CNH unchanged while above the 6.8950 level in the next weeks.

Key Quotes

24-hour view: “Our expectations for USD to ‘rise above the NY high near 6.9510’ did not materialize as it traded sideways in a range of 6.9252/6.9460 before closing largely unchanged at 6.9430 (+0.05%). The underlying tone still appears to be firm and we continue to see chance for USD to rise above 6.9510. The major resistance at 6.9650 is unlikely to come under threat. Support is at 6.9350, followed by 6.9250.”

Next 1-3 weeks: “We have held a positive USD view since last Thursday (20 Apr, spot at 6.8920). After USD soared to a high of 6.9509, we highlighted yesterday (26 Apr, spot at 6.9370) that ‘while upward momentum has improved further, the rally appears to be running ahead of itself and the major resistance at 6.9650 might not come into view so soon’. We continue to hold the same view. Overall, USD is expected to stay underpinned in the coming days as long as it stays above 6.8950 (no change in ‘strong support’ level).”