FX Strategists at UOB Group noted further upside in USD/CNH is likely to meet a tough hurdle at 7.1560 ahead of 7.1650 in the next weeks.
Key Quotes
24-hour view: “USD traded sideways between 7.1090 and 7.1264 yesterday, narrower than our expected range of 7.1050/7.1300. Despite the quiet price action, the underlying tone has weakened and from here, USD could dip below the 7.1050 support. For today, the next support at 7.0950 is not expected to come into the picture. Resistance is at 7.1250.”
Next 1-3 weeks: “Despite the relatively strong bounce last Friday (7.1337, +0.32%), upward momentum has not improved by much and it is too early to expect a sustained advance in USD. While USD could edge higher from here, any up-move is expected to encounter solid resistance at 7.1560 followed by the year-to-date high near 7.1650 which is acting as a formidable resistance. On the downside, a breach of 7.0800 would indicate the current mild upward pressure has eased.”
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