FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang note there is scope for extra advances in USD/CNH in the next weeks.

Key Quotes

24-hour view: “USD soared to a high of 6.7266 yesterday before closing on a firm note at 6.7266 (+0.61%). Upward momentum has improved rapidly and USD could rise to 6.7400. The next resistance at 6.7500 is likely out of reach for now. Support is at 6.7180 followed by 6.7100.”

Next 1-3 weeks: “Our latest narrative was from last Friday (08 Jul, spot at 6.6970) where the recent build-up in upward momentum has fizzled out and we expected USD to consolidate and trade between 6.6600 and 6.7400. We did not expect the strong surge yesterday that sent USD soaring to a high of 6.7266. Rapidly improving upward momentum suggests USD could strengthen further to 6.7500. The upside is intact as long as USD does not move below 6.6950 (‘strong support’ level) within these few days.”