USD/CNH still needs to clear 7.0000 to allow for extra gains in the next weeks, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the price movements are likely part of a consolidation phase’ and we expected USD to trade sideways between 6.9400 and 6.9840. Our view of consolidation was not wrong even though USD traded within a narrower range than expected (6.9643/6.9863). The price actions offer no fresh clues and USD could continue to consolidate, likely between 6.9550 and 6.9900.”

Next 1-3 weeks: “There is no change in our view from Wednesday (08 Mar, spot at 6.9880). As highlighted, while the outlook for USD is still positive, it has to break and stay above 7.0000 before further advance to 7.0200 is unlikely. The upside risk is intact as long as USD stays above 6.9140 (no change in ‘strong support’ level from yesterday).”