USD/CNH still targets 6.8000 near term – UOB

Further upside momentum could lift USD/CNH to the 6.8000 area in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘strengthen further’ yesterday but we were of the view that ‘any advance is expected to face solid resistance at 6.7910’. USD subsequently rose to 6.7880 before dropping back down quickly. The price actions appear to be part of a consolidation and USD is likely to trade between 6.7630 and 6.7910 for today.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (21 Jul, spot at 6.7740). As highlighted, after the strong advance on Wednesday, upward momentum has been boosted and we see room for USD to rise to 6.8000. Only a break of 6.7400 (no change in ‘strong support’ level from yesterday) would indicate that the current upward pressure that started more than a week ago has dissipated.”