Room for USD to rise; the 7.1600 level is likely out of reach. In the longer run, upward momentum is building, but USD must break and remain above 7.1600 before further sustained gains are likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

USD/CNH looks to test 7.1600

24-HOUR VIEW: “We indicated yesterday that ‘The increasing momentum suggest USD is likely to rise further, potentially reaching 7.1600.’ However, USD rose less than expected, pulling back from 7.1500. Despite pulling back, the underlying tone appears firm. Today, we continue to see room for USD to rise, even though the 7.1600 level is likely out of reach. On the downside, support levels are at 7.1375 and 7.1300.”

1-3 WEEKS VIEW: “Our update from yesterday (28 Oct, spot at 7.1460) remains valid. As highlighted, ‘While upward momentum is building, USD must break and remain above 7.1600 before further sustained gains are likely.’ The likelihood of USD breaking clearly above 7.1600 will remain intact, provided that 7.1200 is not breached in the next few days.”