There is an increasing likeliness that USD/CNH could break above the 6.7400 level in the next few weeks, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for USD to ‘rise to 6.7270’ did not materialize as it traded within a range of 6.7033/6.7190 before closing largely unchanged at 6.7162 (+0.06%). The movement appears to be part of a consolidation and USD is likely to trade sideways for today, expected to be between 6.7050 and 6.7250.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (06 Jul, spot at 6.7140). As highlighted, after consolidating for a few weeks, shorter-term upward momentum is beginning to build and the risk of a break of 6.7400 has increased. The upside risk would remain intact as long as USD does not move below the ‘strong support’ level, currently at 6.6850. Looking ahead, the next resistance above 6.7400 is at 6.7600.”