USD/CNH keeps pointing to further upside – UOB

UOB Group’s FX Strategists noted USD/CNH faces a strong resistance at the 6.4105 level in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘could rise above 6.3800’. We added, ‘the next resistance at 6.3880 is unlikely to come under threat’. The anticipated USD strength exceeded our expectations as USD rose to 6.3906. Upward momentum is building and USD could advance to 6.4000. The month-to-date high at 6.4105 is unlikely to come into the picture. Support is at 6.3850 followed by 6.3800.”

Next 1-3 weeks: “Last Thursday (17 Mar, spot at 6.3600), we highlighted that USD ‘is likely to consolidate and trade within a broad range of 6.3300/6.3900 for now’. After trading sideways for several days, USD edged above the top of the expected range at 6.3900 (high of 6.3906). Shorter-term upward momentum is beginning to build and the bias is on the upside. However, the chance for a clear break of 6.4105 is not high for now. On the downside, a breach of the ‘strong support’ level, currently at 6.3730 would indicate that the build-up in momentum has fizzled out.”