USD/CNH keeps the positive view and is expected to surpass the 6.5000 level in the short-term horizon, according to UOB Group’s FX Strategists.
24-hour view: “Our expectations for USD to ‘continue to trade sideways’ were incorrect as it rose to 6.4967 before pulling back. Despite the relatively strong advance, upward momentum has not improved by as much and USD is unlikely to strengthen much further. For today, USD is more likely to consolidate and trade between 6.4780 and 6.4980.”
Next 1-3 weeks: “We have held the same since last Tuesday (10 Aug, spot at 6.4830) where USD ‘has to close above the major resistance at 6.5000 before a sustained advance can be expected’. USD rose to 6.4967 yesterday (17 Aug) before easing off. Upward momentum has improved slightly and the chance for USD to close above 6.5000 has increased. The next resistance above 6.5000 is at 6.5180 followed by 6.5300. On the downside, a break of 6.4650 (no change in ‘strong support’ level) would indicate that USD is not ready to head higher just yet.”
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