In opinion of FX Strategists at UOB Group, USD/CNH is seen prolonging the upside momentum for the time being.
Key Quotes
24-hour view: “The strong surge in USD that hit 7.0550 came as a surprise. The rapid retreat from the high suggests USD is likely to trade a breather and trade between 6.9800 and 7.0500 for today.”
Next 1-3 weeks: “We indicated two days (11 Mar, spot at 6.9600) that ‘a short-term bottom is in place’. We added yesterday (12 Mar) that ‘looking forward, if USD register a daily closing above 7.0000, it would indicate the start of a stronger rebound to 7.0250’. The scenario is supposed to take at least a few days to evolve but USD rocketed to 7.0412 yesterday in one breath. From here, further USD strength would not be surprising and a break of last month’s 7.0567 peak could lead to a move towards 7.0865 (high in Dec last year). On the downside, ‘strong support’ level is at 6.9500.”
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