In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, USDCNH could still slip back to the 7.0130 region in the next few weeks.

Key Quotes

24-hour view: “We expected USD to ‘trade within a range of 7.0260/7.0800’ yesterday. However, USD traded within a narrower range than expected (7.0225/7.0609). The underlying tone has firmed somewhat and USD is likely to trade with an upward bias. That said, any advance is not expected to break 7.0850. On the downside, a breach of 7.0400 would indicate that the mild upward bias has eased.”

Next 1-3 weeks: “Our update from yesterday (15 Nov, spot at 7.0465) still stands. As highlighted, there is room for USD to drop further to 7.0130 but oversold short-term conditions could lead to consolidation first. Overall, only a break of 7.1200 (no change in ‘strong resistance’ level from yesterday) would indicate that USD is not weakening further.”