UOB Group’s FX Strategists expect USD/CNH to gain extra upside traction once 6.4105 is cleared.
24-hour view: “Last Friday, we expected USD to “trade sideways within a 6.3790/6.3960 range”. However, it rose to 6.3999 before closing on a firm note at 6.3949 (+0.13%). Upward momentum has improved, albeit not by all that much. From here, there is room for USD to test 6.4050 but a sustained advance above this level is unlikely (next resistance is at 6.4105). On the downside, a break of 6.3900 would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Our latest narrative was from last Thursday (10 Jun, spot at 6.3830) where USD likely to trade sideways within a range of 6.3650/6.4050. While there is no change in our view for now, shorter-term upward momentum is beginning to improve. That said, USD has to close above the strong resistance at 6.4105 before a sustained advance can be expected. At this stage, the prospect for USD to close above 6.4105 is not high but it would increase quickly unless USD drops below 6.3830 within these few days.”
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