USD/CNH: Further upside seen on a close above 6.4105 – UOB

Extra gains in USD/CNH look likely above the 6.4105 level, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we held the view that the bias for USD is on the downside but we indicated, ‘any weakness is unlikely to break 6.3700’. USD subsequently dipped to 6.3728 before rebounding to close to at 6.3847 (+0.01%). USD traded on a firm note during early Asian hours and the risk has shifted to the upside. A breach of 6.4000 would not be surprising but the month-to-date high at 6.4105 is unlikely to come under threat. Support is at 6.3870 followed by 6.3810.”

Next 1-3 weeks: “We highlighted last Friday (25 Mar, spot at 6.3800) that USD is not ready to head higher and we expected it to trade between 6.3450 and 6.4000. We did not expect the rapid manner by which it is approaching 6.4000. While upward momentum is beginning to build again, USD has to break and close above 6.4105 before a sustained advance is likely. The chance for USD to close above 6.4105 would remain intact as long as USD does not move below 6.3750 within these 1 to 2 days.”