According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, the continuation of the upside momentum could motivate USD/CNH to challenge the next resistance at 6.8600 ahead of 6.8800.
24-hour view: “The strong and rapid rise in USD last Friday is accompanied by strong upward momentum and USD is likely to strengthen further. Resistance is at 6.8600. As conditions are overbought, the next resistance at 6.8600 is not expected to come under threat. On the downside, a break of 6.8240 (minor support is at 6.8330) would indicate that the current strong upward pressure has eased.”
Next 1-3 weeks: “Last Friday, USD soared to a 2-year high of 6.8440 before closing at 6.8318 for a weekly gain of 1.43%. The weekly gain is the largest 1week advance since Apr last week. Solid upward momentum is likely to lead to further USD strength. Resistance levels are at 6.8600 and 6.8800. Overall, only a break of 6.8100 would indicate that USD is unlikely to advance further.”