The continuation of the uptrend could see USD/CNH challenge the 7.0000 level and beyond in the short-term horizon, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “While we expected USD to strengthen further yesterday, we were of the view that ‘the major resistance at 7.0000 is unlikely to come into view’. We noted, ‘Support is at 6.9650, followed by 6.9550’. Our view was not wrong as USD rose to 6.9898 before pulling back to a low of 6.9551. The pullback amid overbought conditions suggests USD is likely to consolidate today, expected to be within a range of 6.9500/6.9800.”

Next 1-3 weeks: “There is no change in our view from yesterday (27 Feb, spot at 6.9750). As highlighted, the strong boost in momentum from last Friday is likely to lead to further USD strength. The resistance levels to watch are at 7.0000 and 7.0200. On the downside, a break of 6.9220 (no change in ‘strong support’ level) would indicate that the USD strength that started early this month has ended.”