According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further upside in USD/CNH is likely to meet tough hurdles at 6.9700 prior to 7.0000 in the next few weeks.

Key Quotes

24-hour view: “We did not expect USD to soar to a high of 6.9640 yesterday (we were expecting it trade in a range). The rapid increase in momentum is likely to lead to further USD strength even though the major resistance at 6.9750 is likely out of reach today. Support is at 6.9480; a breach of 6.9400 would indicate that USD is not advancing further.”

Next 1-3 weeks: “Yesterday (11 May, spot at 6.9330), we indicated that ‘there does not appear to be any directional bias and for the time being’ and we expected USD to ‘trade in a range of 6.9100/6.9630’. We did not expect USD to rise so quickly to the top of the expected range (high of 6.9640). Upward momentum is beginning to build and USD is likely to trade with an upward bias. However, it is worth noting the resistance at 6.9750 and the significant level at 7.0000. On the downside, a breach of 6.9250 would suggest USD is not ready to head higher.”