USD/CNH: Upside bias unchanged above 6.7400 – UOB
Further gains in USD/CNH are likely while above the 6.7400 level, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: “The jump of 1.00% (NY close of 6.8063) in USD last Friday came as a surprise (we were expecting sideways trading). While USD extended its ascent in Asian trade, conditions are deeply overbought. That said, USD could continue to rise even though the major resistance at 6.8800 is unlikely to come under threat today (there is another resistance at 6.8500). Support is at 6.8000, followed by 6.7800.”
Next 1-3 weeks: “Our view last Thursday (02 Feb, spot at 6.7120) for USD to weaken was invalidated as it burst above our ‘strong resistance’ level at 6.7550 and rocketed to a high of 6.8100. Short-term conditions are deeply overbought but as long as the ‘strong support’ level, currently at 6.7400 is not breached, USD could rise further to 6.8500, as high as 6.8800.”