FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang expect USD/CNH to edge higher and revisit the 6.9400 and 6.9600 levels in the next weeks.

Key Quotes

24-hour view: “We expected USD to ‘trade sideways between 6.9000 and 6.9300’ yesterday. However, USD dropped to 6.8911 before rebounding. The rebound has gathered momentum and USD is likely to trade with an upward bias towards 6.9325. The major resistance at 6.9400 is unlikely to come into the picture. Support is at 6.9020 followed by 6.8920.”

Next 1-3 weeks: “On Monday (29 Aug, spot at 6.9140), we highlighted that the rapid boost in momentum indicates that the USD strength could extend to 6.9400, possibly 6.9600. USD subsequently soared to 6.9325. There is no change in our view for now but USD could consolidate for a couple of days first. Overall, only a break of 6.8700 (no change in ‘strong support’ level from yesterday) would indicate that the USD strength that started two weeks ago has run its course.”