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FX Strategists at UOB Group noted USD/CNH faces further upside while above the 6.4900 level in the short-term horizon.

Key Quotes

24-hour view: “USD traded between 6.4635 and 6.4836 yesterday, higher than our expected sideway-trading range of 6.4580/6.4800. Momentum indicators are mostly ‘neutral’ and we continue to expect USD to trade sideways, likely between 6.4600 and 6.4830.”

Next 1-3 weeks: “We have held a positive view in USD for two weeks now. In our latest narrative from last Friday, we highlighted that ‘upward momentum has been boosted’ and ‘there is room for USD to move towards 6.5150’. However, since then, USD has not been able to make much headway on the upside as it traded in a quiet manner after retreating from 6.5080. Upward momentum is beginning to wane and in order to rejuvenate the flagging momentum, USD has to move and stay above 6.4900 or the prospect for further USD strength would diminish quickly. Conversely, a break of 6.4400 (no change in ‘strong support level) would indicate that the positive phase has run its course.”