While above the 6.7400 level, USD/CNH could challenge the 6.8500 region ahead of 6.8800, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
Key Quotes
24-hour view: “We expected USD to trade within a range of 6.7800/6.8200 yesterday. USD subsequently traded between 6.7765 and 6.8070. The underlying tone has softened somewhat and USD is likely to edge lower today. However, any decline is unlikely to break below 6.7600 (next support is at 6.7400). On the upside, a breach of 6.8000 would indicate that the current mild downward pressure has faded.”
Next 1-3 weeks: “Two days ago (06 Feb, spot at 6.8200), we highlighted that while short-term conditions are deeply overbought, as long as the ‘strong support’ level, currently at 6.7400 is not breached, USD could rise further to 6.8500, as high as 6.8800. We continue to hold the same view.”