USD/CNH: Upside bias diminished below 6.8700 – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang note the bullish bias in USD/CNH could lose momentum in case 6.8700 is breached.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade with an upward bias towards 6.9325’ was incorrect as it dropped briefly to 6.8882 before rebounding to close at 6.9154 (+0.12%). Despite the decline, downward momentum has not improved. The current movement is likely part of consolidation phase and we expect USD to trade sideways between 6.8900 and 6.9250 for today.”

Next 1-3 weeks: “We turned positive USD two weeks ago. USD subsequently soared to 6.9325 but has not been able to make any further headway to the upside. While upward momentum has waned somewhat, only a break of 6.8700 (no change in ‘strong support’ level from yesterday) would indicate that USD is not strengthening further.”