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FX Strategists at UOB Group noted USD/CNH could visit the 7.05 zone once 7.0230 is cleared.

Key Quotes

24-hour view: “Expectation for USD to move above the early February peak of 7.0230 did not materialize as it eased off from a high of 7.0168. Upward momentum still appears firm and we continue to see chance for USD to move above 7.0230. That said, the next resistance at 7.0350 is likely out of reach. Support is at 7.0020 followed by 6.9950.”

Next 1-3 weeks: “We have held view that USD is expected to ‘trade sideways’ for close to 2 week now. Since then, USD traded sideways before soaring by +0.34% yesterday. The rapid pick up in momentum suggests the consolidation phase could be close to an end. From here, if USD were to close above 7.0230 in NY, it would indicate the start of an up leg towards 7.0500. At this stage, the prospect for such a scenario is not high but it would improve quickly as long as USD does not move below 6.9850 within these few days.”

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