According to Economist Lee Sue Ann and Markets Strategist Que Ser Leang at UOB Group, extra gains in USD/CNH could retest the 7.1200 region in the short-term horizon.
24-hour view: “Yesterday, we held the view that USD might break above the major resistance at 7.0960. We indicated, ‘Support is at 7.0600, followed by 7.0450’. Our expectations did not materialize as USD rose briefly to 7.0809, dropped to 7.0461 before closing little changed at 7.0645 (-0.02%). We continue to see chance of USD breaking above 7.0960 today. However, it might not be able to hold above this level. Support is at 7.0600, followed by 7.0480.”
Next 1-3 weeks: “Our update from yesterday (24 May, spot at 7.0780) is still valid. As highlighted, the boost in momentum suggests USD is likely to break above 7.0960. A breach of this level will shift the focus to 7.1200. On the downside, a break of the ‘strong support’ level at 7.0280 (no change in level) would indicate the USD strength that started about 2 weeks ago has come to an end.”
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