FX Strategists at UOB Group noted occasional bullish attempts in USD/CNH are likely to meet a tough barrier in the 7.1560/7.1650 band.
Key Quotes
24-hour view: “We expected USD to strengthen yesterday but were of the view ‘any advance is likely limited to a test of 7.1400’. While the subsequent advance exceeded our expectation, the up-move was short-lived as USD dropped back quickly after touching a high of 7.1443. Upward momentum has dissipated and for today, USD is likely to consolidate and trade between 7.1050 and 7.1300.”
Next 1-3 weeks: “Despite the relatively strong bounce last Friday (7.1337, +0.32%), upward momentum has not improved by much and it is too early to expect a sustained advance in USD. While USD could edge higher from here, any up-move is expected to encounter solid resistance at 7.1560 followed by the year-to-date high near 7.1650 which is acting as a formidable resistance. On the downside, a breach of 7.0800 would indicate the current mild upward pressure has eased.”
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