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FX Strategists at UOB Group now sees USD/CNH edging higher in the near-term, although always between the broader 6.7500-6.8300 range.

Key Quotes

24-hour view: “The strong advance in USD yesterday came as a surprise (high of 6.8080). The rapid rise appears to be running ahead of itself and further sustained gain is unlikely. USD is more likely to consolidate and trade sideways at these higher levels, expected to be between 6.7700 and 6.8100.”

Next 1-3 weeks: “We have held a negative view in USD since mid-August. In our latest narrative from last Thursday (17 Sep, spot at 6.7520), we indicated that the ‘decline is oversold but outlook for USD remains weak for now’ and we added, ‘pace of any further weakness is likely to be slower and next major support 6.7165 may be out of reach this time round’. Yesterday (21 Sep), USD rebounded strong and touched a high of 6.8080, not far below our ‘strong resistance’ level of 6.8100. While the ‘strong resistance’ is still intact, downward momentum has waned considerably and this coupled with the still oversold conditions suggest that the month-long negative phase has run its course. From here, there is room for the current rebound to extend higher but for now, any advance is viewed as part of broad 6.7500/6.8300 range.”