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FX Strategists at UOB Group remain positive on USD/CNH, although a test of tops beyond 7.08 appears unlikely in the near-term at least.

Key Quotes

24-hour view: “Our view that “there is room for advance in USD to extend to 7.0600” did not materialize as it eased off slightly from a high of 7.0567. The underlying tone still appears firm and we continue to see chance for USD to probe the 7.0600 resistance. That said, the prospect for a sustained rise above this level is not high. Support is at 7.0380 followed by 7.0280.”

Next 1-3 weeks: “We noted on Wednesday (19 Feb, spot at 7.0100) that the ‘consolidation phase could be close to an end’. However, the manner by which USD blew above the early February peak of 7.0230 was not exactly expected. From here, further USD strength is likely but at this stage, it is too early to anticipate a move the December’s peak at 7.0865 (there is another resistance at 7.0660). For the next few days, the ‘strong support’ level at 7.0150 is likely strong enough to hold.”