Further upside could now prompt USD/CNH to challenge the 6.8500 region in the short-term horizon, comment Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the increase is upward momentum is likely to lead to further USD strength but 6.8500 could be out of reach today’. Our view was not wrong as USD rose to 6.8444 before pulling back. The pullback amid overbought conditions suggests USD is unlikely to advance further. Today, we expect USD to trade sideways, expected to be within a range of 6.8050/6.8350.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (13 Feb, spot at 6.8275). As highlighted, upward momentum is beginning to build and the likelihood of USD breaking above 6.8500 has increased. The next resistance level above 6.8500 remains at 6.8800. Overall, only a break of 6.7800 (no change in ‘strong resistance’ level) would indicate that 6.8500 is not coming into view.”