Extra gains in USD/CNH need to break above the 7.0000 mark in the next weeks to extend the upside, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We did not expect the surge in USD to a high of 6.9840 during NY session. In view of the solid momentum, USD is likely to advance further even though it is left to be seen if it can break the major resistance at 7.0000. On the downside, a break of 6.9550 (minor support at 6.9750) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “On Monday (12 Sep, spot at 6.9180), we indicated that the recent month-long rally in has ended and we expect USD to consolidate and trade between 6.9000 and 6.9700. Yesterday, USD jumped above 6.9700 and surged to 6.9840. Upward momentum is building again but USD has to close above 7.0000 before sustained advance is likely. Looking ahead, the next resistance is at 7.0300. Support is at 6.9550 but only a breach of 6.9400 would indicate that USD is not ready to move above 7.0000.”