USD/CNH: Further up comes 6.6300 – UOB

Extra gains in USD/CNH could see the 6.6300 level retested in the next weeks, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the strong rally over the past few days is ready to take a breather’ and we expected USD to ‘trade sideways within a range of 6.5500/6.6000’. USD subsequently traded between 6.5448 and 6.5985. We continue to expect USD to trade sideways even though the slightly firmed underlying tone suggests a higher range of 6.5650/6.6050.”

Next 1-3 weeks: “Our update from yesterday (26 Apr, spot at 6.5700) still stands. As highlighted, overbought shorter-term conditions could lead to 1 to 2 days of consolidation first but USD is likely to head higher later on. The next resistance above 6.6090 is at 6.6300. On the downside, a breach of 6.5300 (‘strong support’ level was at 6.4900 yesterday) would indicate that the strong phase in USD that started late last week has run its course.”