FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang believe USD/CNH could extend the 6.6600-6.7400 range in the next few weeks.
24-hour view: “Yesterday, we highlighted that ‘the underlying tone has firmed somewhat and USD could edge higher but 6.7200 is unlikely to come into the picture’. While our view for USD to strengthen was not wrong, we did not expect the sharp rise to 6.7340. However, the advance was short-lived as USD pulled-back swiftly from the high. The pullback amidst overbought conditions suggest that USD is unlikely to advance further. For today, USD is more likely to trade between 6.6900 and 6.7300.”
Next 1-3 weeks: “On Monday (20 Jun, spot at 6.7080), we highlighted that USD is likely to trade between 6.6600 and 6.7400. There is no change in our view for now. That said, shorter-term upward momentum has improved somewhat and this could lead to a test of 6.7400. Looking ahead, a clear break of 6.7400 could lead to a move towards 6.7600.”
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