USD/CNH: Upside momentum has improved – UOB

USD/CNH could extend the upside to the 6.7650 region in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘could strengthen further but overbought conditions suggest a sustained rise above 6.7450 is unlikely’. While USD strengthened as expected, it only touched a high of 6.7371. Conditions remain overbought but the current advance appears to have enough momentum for another push to 6.7450. For today, a sustained rise above this level is unlikely. Support is at 6.7110 followed by 6.6900.”

Next 1-3 weeks: “There is not much to add to our update from two days ago (27 Oct, spot at 6.6980). As highlighted, the corrective recovery in USD ‘has scope to extend to 6.7450’. Upward momentum has improved and if USD were to break 6.7450, the next level to focus on is at 6.7650. Overall, USD is expected to trade with an upward bias as long as it does not move below 6.6750 (‘strong support’ level previously at 6.6600).”