USD/CNH could now advance to the 6.4100 level – UOB

The upside momentum in USD/CNH could push the pair back to the 6.4100 level in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘the sharp and rapid rise appears to be running ahead of itself and USD is unlikely to advance much further’ and we expected USD to ‘trade between 6.3800 and 6.4000’. USD subsequently traded between 6.3786 and 6.3965. The underlying tone has softened somewhat but any weakness is expected to encounter strong support at 6.3730. Resistance is at 6.3870 followed by 6.3920.”

Next 1-3 weeks: “After USD rose to 6.3975, we highlighted last Friday (07 Jan, spot at 6.3900) that “upward momentum has improved slightly but it appears too early to expect a sustained advance”. We added, there is room for USD to edge higher to 6.4100 but a breach of 6.3730 (no change in ‘strong support’ level) would indicate that the build-up in momentum has fizzled out. There is no change in our view for now.”