USD/CNH: Upside momentum seen improving in the near term – UOB

A more serious advance in USD/CNH needs to break above the 6.9350 level in the short-term horizon, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Last Friday, we expected USD to trade in a range of 6.8700/6.8900. However, USD rose to a high of 6.9061 and then closed at 6.8974 (+0.18%). Upward momentum has improved a tad and USD is likely to trade with an upward bias. However, any advance is likely to face strong resistance at 6.9100. The major resistance at 6.9350 is not expected to come under threat. Support is at 6.8860, followed by 6.8780.”

Next 1-3 weeks: “Our update from last Thursday (20 Apr, spot at 6.8920) still stands. As highlighted, upward momentum is beginning to improve but USD has to break and stay above 6.9350 before a sustained rise is likely. The chance of USD breaking clearly above 6.9350 is not high for now but it will remain intact as long as the ‘strong support’ level at 6.8600 (no change in level) is not taken out in the next 1-2 days.”