USD/CNH is forecast to advance further once 6.4500 is cleared, noted FX Strategists at UOB Group.
24-hour view: “We highlighted yesterday that ‘there is room USD to test the strong resistance at 6.4400’. We added, a sustained advance above this level is unlikely. The subsequent advance exceeded our expectation as USD popped to 6.4500 before easing off. The pullback from the high could extend lower but any weakness is likely limited to 6.4200. The next support at 6.4000 is not expected to come into the picture. Resistance is at 6.4400 followed by the rather solid level at 6.4500.”
Next 1-3 weeks: “Yesterday (17 Feb, spot at 6.4285), we held the view that rebound in USD ‘could extend higher but any advance is likely limited to a test of 6.4500’. However, we did not anticipate the rapid manner by which USD popped to 6.4500 (overnight high). The swift retreat from the high suggests that 6.4500 is a solid resistance and USD has to break this level before further gains can be expected. Meanwhile, USD could trade between 6.4100 and 6.4500 for a few days.”