USD/CNH faces a probable move to 7.0567 – UOB
FX Strategists at UOB Group noted USD/CNH could advance further and re-visit February highs at 7.0567.
24-hour view: “We expected USD to ‘strengthen towards 7.0000’ yesterday. However, it surged to an overnight high of 7.0412 (before extending its gain early this morning). The rapid rise appears to be running ahead of itself and for today, USD is likely to trade within a broad 7.0000/7.0600 range.”
Next 1-3 weeks: “We indicated two days (11 Mar, spot at 6.9600) that ‘a short-term bottom is in place’. We added yesterday (12 Mar) that ‘looking forward, if USD register a daily closing above 7.0000, it would indicate the start of a stronger rebound to 7.0250’. The scenario is supposed to take at least a few days to evolve but USD rocketed to 7.0412 yesterday in one breath. From here, further USD strength would not be surprising and a break of last month’s 7.0567 peak could lead to a move towards 7.0865 (high in Dec last year). On the downside, ‘strong support’ level is at 6.9500.”