USD/CNH needs to surpass the 6.9300 level to allow for extra upside in the short-term horizon, comment UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘is likely to edge higher but it is unlikely to challenge the major resistance at 6.9300’. Instead of edging higher, USD traded choppily as it dropped to 6.8844, rebounded strongly to 6.9242 before easing off to close at 6.9187 (+0.15%). Despite the advance, upward momentum has not improved much. However, as long as 6.8900 is not breached, USD could rise to 6.9300 before the risk of a more sustained pullback increases.”

Next 1-3 weeks: “We highlighted yesterday (23 Feb, spot at 6.9050) that the USD strength that started early this month is intact as long as it stays above 6.8700. We added, a break of 6.9300 would shift the focus to 6.9500. While we continue to hold the same view, short-term upward momentum is beginning to wane and USD has to break above 6.9300 within the next 1-2 days or the risk of an end to the USD strength will increase quickly.”