Further upside is likely in USD/CNH, although it is expected to meet a solid hurdle around the 7.0000 region, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We did not anticipate the strong rise in USD to 6.9520 yesterday (we were expecting USD to trade in a range). While the sharp advance appears to be running ahead of itself, there is scope for USD to edge above 6.9600. However, USD is unlikely to be able to maintain a foothold above this level. On the downside, a breach of 6.9280 (minor support is at 6.9360) would indicate that USD is unlikely to advance further.”

Next 1-3 weeks: “Yesterday (06 Mar, spot at 6.9085), we indicated that USD is likely to trade in a broad range of 6.8500/6.9600. USD rose to a high of 6.9520 in NY trade and upward momentum appears to be building. USD is likely to trade with an upward bias but any advance is likely to encounter solid resistance at 7.0000. The upside bias is intact as long as USD does not break the ‘strong support’ level, currently at 6.9000.”