USD/CNH: Upside momentum looks under pressure – UOB
|According to FX Strategists at UOB Group, USD/CNH needs to regain the area above 6.4900 to extend the buying interest.
Key Quotes
24-hour view: “Yesterday, we expected USD to ‘trade sideways between 6.4600 and 6.4830’. USD subsequently traded between 6.4580 and 6.4782. The underlying tone has improved and this could lead to USD edging higher to 6.4900. For now, a sustained advance above this level is unlikely. Support is at 6.4700 followed by 6.4600.”
Next 1-3 weeks: “We have held a positive view in USD for two weeks now. In our latest narrative from last Friday, we highlighted that ‘upward momentum has been boosted’ and ‘there is room for USD to move towards 6.5150’. However, since then, USD has not been able to make much headway on the upside as it traded in a quiet manner after retreating from 6.5080. Upward momentum is beginning to wane and in order to rejuvenate the flagging momentum, USD has to move and stay above 6.4900 or the prospect for further USD strength would diminish quickly. Conversely, a break of 6.4400 (no change in ‘strong support level) would indicate that the positive phase has run its course.”
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