Extra gains could now push USD/CNH to the 6.4800 area in the short-term, commented Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected USD to strengthen yesterday, we were of the view that ‘the major resistance at 6.4500 is unlikely to come under threat’. The subsequent USD strength exceeded our expectations as it surged to 6.4558 before easing off. The rapid rise appears to be overdone and USD is unlikely to advance further. For today, USD is more likely to trade sideways between 6.4250 and 6.4550.”

Next 1-3 weeks: “We have held a positive view in USD since the start of the week (see annotations in the chart below). Yesterday (20 Apr, spot at 6.4170), we highlighted that USD could strengthen further but any advance is expected to face strong resistance at 6.4500. We did not quite expect the strong surge that sent USD soaring to a high of 6.4558. Further USD strength is not ruled out but overstretched shorter-term could lead to a couple of days of consolidation first. Overall, only a breach of 6.4050 (‘strong support’ level was at 6.3900 yesterday) would indicate that the current upward pressure has eased. On the upside, the next resistance above 6.4560 is at 6.4800.”