USD/CNH: There is still room for a move to 6.8600 – UOB

USD/CNH could extend the rebound to the 6.8600 level in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘momentum indicators are mostly neutral and further sideway-trading would not be surprising, likely between 6.8100 and 6.8400’. Our view was not wrong even though USD traded within a narrower range than expected (6.8101/6.8349). While the underlying tone has weakened somewhat, USD is unlikely to weaken much. Overall, USD could drift lower but any weakness is viewed as part of 6.8050/6.8350 range.”

Next 1-3 weeks: “There is not much to add to our latest narrative from last Thursday (24 Sep, spot at 6.8220). As highlighted, the ‘rebound in USD could extend to 6.8600’. While momentum has not improved by much, there is still chance for USD to move to 6.8600. At this stage, the prospect for a sustained advance above this level is not high. Support is at 6.8000 but only a break of 6.7800 (no change in ‘strong support’ level) would indicate the current upward pressure has eased.”