According to FX Strategists at UOB Group, USD/CNH could edge higher and test the 6.5200 area in the next weeks.
Key Quotes
24-hour view: “We highlighted last Friday that ‘the underlying tone has improved a tad’ and we expected USD to ‘trade within a higher range of 6.4580/6.4900’. While our view was not wrong, USD traded within a narrower range than expected (6.4630/6.4855). The underlying tone has improved further and USD is likely to edge upwards to 6.5000. For today, a sustained rise above this level is unlikely. Support is at 6.4760 followed by 6.4670.”
Next 1-3 weeks: “We highlighted last Friday (15 Jan, spot at 6.4680) that upward momentum is begging to improve and a clear break of 6.4900 could lead to USD moving higher to 6.5200. Upward momentum has improved further and USD is currently holding just below 6.4900. In other words, there is no change in our view. The prospect for USD to move to 6.5200 would increase further as long as 6.4450 (‘strong support’ level previously at 6.4300) is not breached.”
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