USD/CNH remains focused on 7.0000 – UOB

A potential test of 7.0200 remains on the cards once USD/CNH clears the 7.0000 barrier, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that the ‘overbought USD advance could edge above 7.0000 but it remains to be seen if it can stay above this level’. Our expectations did not turn out as USD dropped to 6.9475 before rebounding to close at 6.9699 (-0.37%). The price movements are likely part of a consolidation phase. Today, USD is likely to trade sideways, expected to be between 6.9400 and 6.9840.”

Next 1-3 weeks: “There is no change in our view from yesterday (08 Mar, spot at 6.9880). As highlighted, while the outlook for USD is still positive, it has to break and stay above 7.0000 before further advance to 7.0200 is unlikely. The upside risk is intact as long as USD stays above 6.9140 (no change in ‘strong support’ level from yesterday).”