Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group said the outlook for USD/CNH still points to further gains in the near term.

Key Quotes

24-hour view: “Yesterday, we expected USD to strengthen but we were of the view that ‘a break of the major resistance at 6.8500 is unlikely today’. The anticipated USD strength exceeded our expectations as it surged to a high of 6.8710. While conditions are overbought, USD could continue to advance. However, a break above the major resistance at 6.8800 is unlikely today. Support is at 6.8580, a breach of 6.8420 would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We have held a positive view in USD since early this month. In our latest narrative from three days ago (13 Feb, spot at 6.8275), we highlighted that ‘the likelihood of USD breaking above 6.8500 has increased’. USD broke above 6.8500 yesterday and soared to a high of 6.8710. The 6.8800 level we indicated early this month appears to be within reach. A break of 6.8800 will shift the focus to 6.9000. Overall, we continue to hold a positive USD stance as long as it does not break below 6.8250 (‘strong support’ level previously at 6.7800).”