USD/CNH could now retest the 6.4000 level – UOB

The upside momentum could push USD/CNH to the 6.4000 level in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong rise in USD to 6.3975 came as a surprise (we were expecting sideway-trading). The sharp and rapid rise appears to be running ahead of itself and USD is unlikely to advance much further. For today, USD is more likely to trade between 6.3800 and 6.4000.”

Next 1-3 weeks: “On Tuesday (04 Jan, spot at 6.3735), we highlighted that the outlook for USD is mixed and it could trade between 6.3400 and 6.3900 for now. After trading in relatively quiet manner for a few days, USD soared to a high of 6.3975 during NY session before closing on a firm note at 6.3943 (+0.29%). Upward momentum has improved slightly but it appears too early to expect a sustained advance. That said, there is room for USD to edge higher to 6.4100. USD has to clear this solid resistance before a sustained advance is likely. On the downside, a breach of 6.3730 would indicate that the build-up in momentum has fizzled out.”