FX Strategists at UOB Group noted the upside momentum in USD/CNH appears to be running out of steam.
24-hour view: “We highlighted yesterday that the ‘USD could move below 7.0600 but strong support at 7.0350 is likely ‘safe’ for today’. USD subsequently touched 7.0600 before rebounding strongly. Despite the rapid bounce, upward momentum has not improved by as much and for today, USD is expected to trade within yesterday’s broad range of 7.0600/7.1428.”
Next 1-3 weeks: “After surging to a high of 7.1652 last Thursday (19 Mar), USD has not been able to make much headway on the upside. The relatively sharp decline of -0.48% yesterday (24 Mar) has dented the upward momentum and the chance for USD to break the strong 7.1700 level has diminished. From here, unless USD moves and stays above 7.1200 within these 1 to 2 days, a break of 7.0350 (‘strong support’ level previously at 7.0180) would indicate that the recent upward pressure has dissipated.”