USD/CNH could now test 7.1800/7.2000 – UOB

Further upside could motivate USD/CNH to challenge the 7.1800 and 7.2000 levels in the next few weeks, comment UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: USD traded between 7.1171 and 7.1465 last Friday, higher than our expected range of 7.1100/7.1400. USD traded on a firm note in early Asian trade today but while the risk is on the upside, any advance is unlikely to break above 7.1800 today. Support is at 7.1360, followed by 7.1200.

Next 1-3 weeks: Last Friday (09 Jun, spot at 7.1500), we highlighted that if USD breaks below 7100, it will suggest that 7.1552 could be an interim top. Not only did USD not break 7.1100, it also rose above 7.1500 again in early Asian trade today. While upward momentum has been rejuvenated, it remains to be seen if USD has enough momentum to rise to 7.1800 and 7.2000. On the downside, the key support level remains unchanged at 7.1100.