FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted USD/CNH could see its upside momentum alleviated on a breach of the 6.8700 level.

Key Quotes

24-hour view: “We expected USD to ‘trade sideways between 6.8900 and 6.9250’ last Friday. Our view was not wrong even though USD traded within a narrower range than expected (6.9004/6.9209). The underlying tone has improved and USD is likely to edge higher for today. However, a break of 6.9400 is unlikely (there is another resistance at 6.9325). Support is at 6.9120 followed by 6.9040.”

Next 1-3 weeks: “Our update from last Friday (02 Sep, spot at 6.9100) still stands. As highlighted, while upward momentum has waned somewhat, only a break of 6.8700 (no change in ‘strong support’ level from last Friday) would indicate that USD is not strengthening further. Looking ahead, resistance levels are at 6.9400 and 6.9600.”