Further upside in USD/CNH could revisit the 6.8000 level in the next weeks, said FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘conditions are deeply overbought and USD is unlikely to strengthen much further’ and we expected USD to ‘trade between 6.7350 and 6.7800’. USD subsequently traded within a wider range than expected (6.7098/6.7750) before closing at 6.7498 (-0.15%). The price actions appear to be part of a consolidation and we expect USD to trade between 6.7200 and 6.7800 for today.”

Next 1-3 weeks: “We highlighted yesterday (10 May, spot at 6.7620) that solid upward momentum is likely to lead to further USD strength to 6.8000. USD subsequently dropped a couple of pips below our strong support level of 6.7100 (low of 6.7098) before rebounding. Upward momentum has waned somewhat but until there is a clear breach of 6.7100, we still see chance for one more push higher to 6.8000.”