USD/CNH looks firmer and now targets 6.3800 – UOB

Further upside could push USD/CNH to the 6.3800 region in the near term, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that ‘despite the quiet trading, upward momentum appears to be building’. We added, ‘a break of 6.3350 could lead to a rise to 6.3450’. While our view for higher USD turned out to be correct, we did not expect the strong surge that sent USD soaring to 6.3641. The rapid rise appears to be running ahead of itself but there is scope for USD to advance to 6.3720. The next resistance at 6.3800 is unlikely to come under threat. Support is at 6.3550 followed by 6.3460.”

Next 1-3 weeks: “Upward momentum received a strong boost and USD could extend its advance o 6.3800. In order to maintain the rapid build-up in momentum, USD should not move below the ‘strong support’ level (currently at 6.3400) within these few days.”