UOB Group’s FX Strategists noted USD/CNH could extend the upside to the 6.4800 level in the near term.
24-hour view: “Last Friday, we held the view that ‘while there is room for USD to move above the major resistance at 6.4660, it is unlikely able to maintain a foothold above this level’. Our expectation did not materialize as it eased off after touching 6.4640. Upward momentum has waned somewhat and this coupled with overbought conditions suggest that the risk for a sustained advance in USD is not high. For today, USD is expected to trade within a 6.4440/6.4660 range.”
Next 1-3 weeks: “There is not much to add to our update from last Friday (18 Jun, spot at 6.4530). As highlighted, ‘upward momentum is stronger than we anticipated and the next level to focus on above 6.4660 is at 6.4800’. The upside risk is deemed intact as long as USD does not move below 6.4270 (no change in ‘strong support’ level). Meanwhile, overbought shorter-term conditions could lead to a couple of days of consolidation first.”
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