FX Strategists at UOB Group still keep the constructive note in USD/CNH, allowing for a potential move to 6.4920 in the next weeks.
Key Quotes
24-hour view: “Our expectation for USD to weaken yesterday was wrong as it surged to a high of 6.4715 before easing off to close on a strong note at 6.4605 (+0.40%). While the rapid rise appears to be running ahead of itself, there is room for a move to 6.4800 first before the current USD strength should ease. Support is at 6.4460 followed by 6.4380.”
Next 1-3 weeks: “Yesterday (18 Feb, spot at 6.4320), we highlighted that ‘6.4500 is a solid resistance and USD has to break this level before further gains can be expected’. We did not quite anticipate the ease by which USD blew past 6.4500 and surged to 6.4715. The break of the solid resistance coupled with improvement in momentum suggests USD could continue to advance in the coming days. The next resistance level of note is at 6.4920. Overall, the outlook for USD is deemed to be positive as long as it does not move below 6.4200.”
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