According to FX Strategists at UOB Group, there is still scope for USD/CNH to edge higher in the near-term.
Key Quotes
24-hour view: “While we indicated yesterday that ‘there is still chance for USD to move above the February peak of 7.0230’, we did not anticipate the sudden acceleration as USD surged to high of 7.0548. The rapid rise appears to be running ahead of itself but there is room for the advance to extend to 7.0600 before the current strong upward pressure should ease. Support is at 7.0350 followed by 7.0250.”
Next 1-3 weeks: “We noted on Wednesday (19 Feb, spot at 7.0100) that the ‘consolidation phase could be close to an end’. However, the manner by which USD blew above the early February peak of 7.0230 was not exactly expected. From here, further USD strength is likely but at this stage, it is too early to anticipate a move the December’s peak at 7.0865 (there is another resistance at 7.0660). For the next few days, the ‘strong support’ level at 7.0150 is likely strong enough to hold.”
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