The next key up barrier for USD/CNH remains at the 7.0000 level, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “Yesterday, we held the view that USD ‘is likely to consolidate between 6.9450 and 6.9850’. Our view for consolidation was not wrong even though USD traded within a narrower range than expected (6.9510/6.9820) before closing largely unchanged at 6.9586 (+0.01%). Further consolidation appears likely, expected to be within a range of 6.9450/6.9750.”
Next 1-3 weeks: “Our view from two days ago (07 Sep, spot at 6.9770) still stands. As highlighted, after the recent strong surge in USD, all eyes are on 7.0000 now. That said, overbought shorter-term conditions could lead to a few days of consolidation first. As long as 6.9300 (no change in ‘strong support’ level from yesterday) is not breached, there is still chance for USD to break 7.0000. A break of this level would shift the focus to 7.0500.”