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In opinion of FX Strategists at UOB Group, further upside momentum in USD/CNH could extend to the 7.04 zone.

Key Quotes

24-hour view: “Expectation for USD to trade sideways last Friday was incorrect as it soared to a high of 7.0068 before ending the day on a firm note at 7.0028. Upward momentum picked up and USD could advance to 7.0280. For today, the major 7.0400 level could be just out of reach. Support is at 7.0000 followed by 6.9800.”

Next 1-3 weeks: “Our latest narrative from Tuesday (28 Jan, spot at 6.9780) remains unchanged wherein USD ‘could extend its gains to 7.0400’. However, after yesterday’s price action, the odds for such a move have diminished somewhat but only a breach of 6.9350 (no change in ‘strong support’ level) would indicate the current USD strength has run its course.”