The likeliness of USD/CNH to advance to the 6.9000 region now seems to have lost momentum, suggest FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “Yesterday, we expected USD to consolidate and trade within a range of 6.8350/6.8750. However, USD rose to 6.8869 before dropping back down quickly. Despite the advance, upward momentum has not improved. In other words, the current movement still appears to be part of consolidation. For today, USD is likely to trade sideways between 6.8500 and 6.8800.”
Next 1-3 weeks: “There is no change in our view from yesterday (24 Aug, spot at 6.8630). As highlighted, the rapid loss in shorter-term upward momentum has diminished the odds for USD to advance further to 6.9000. However, only a break of 6.8330 (no change in ‘strong support’ level from yesterday) would indicate that USD strength that started early last week has run its course.”
