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According to FX Strategists at UOB Group, further upside momentum in USD/CNH is expected to meet resistance in the 7.04 region.

Key Quotes

24-hour view: “Our expectation for USD to consolidate was incorrect as it soared to a high of 7.0301 before dropping back down to close little changed at 7.0144 (+0.02%). USD opened on a weak note this morning and while downward momentum is not exactly strong, USD could drift lower to 6.9920 (minor support is at 7.0000). Resistance is at 7.0150 followed by 7.0220.”

Next 1-3 weeks: “We have expected USD to weaken since early this month and in our latest update yesterday (22 Jul, spot at 6.9720), we indicated that ‘the odds for a move to 6.9500 have increased’. USD subsequently eked out a fresh low of 6.9645 before staging a dramatic reversal that sent it to a high of 7.0174. The break of our ‘strong resistance’ level at 6.9920 indicates that USD is no more under pressure. The current USD strength is viewed as part of a corrective rebound but at this stage, any advance is expected to face solid resistance at 7.0400. On the downside, the ‘strong support’ level is at 6.9750.”