Upward momentum improves in USD/CNH – UOB

USD/CNH faces extra gains on a close above 6.5360 in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view yesterday was that ‘there is scope for the advance in USD to test 6.5300 first before easing’. USD rose to 6.5295 before edging slightly above 6.5300 after NY closed. The underlying tone still appears to be a tad strong and USD could test 6.5360. A sustained rise above this level appears unlikely. On the downside, a break of 6.5200 would indicate the current mild upward pressure has eased.”

Next 1-3 weeks: “We have expected USD to ‘trade between 6.4730 and 6.5360’ for about 2 weeks now. While there is no change in our view, upward momentum is beginning to improve. However, USD has to close above 6.5360 before a move towards the month-to-date high near 6.5630 can be expected. At this stage, the chance for such a move is not high but it would increase as long as USD does not move below 6.5080 within these few days.”