USD/CNH now looks to 6.5200 near-term – UOB

FX Strategists at UOB Group noted the upside bias in USD/CNH could extend to the 6.5200 level in the short-term.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘could edge higher but any advance is viewed as part of a 6.4500/6.4750 range’. We added, “a sustained rise above 6.4750 is not expected”. Our view was not wrong as USD eased off after touching 6.4774. The underlying tone has improved a tad and for today, USD is likely to trade within a higher range of 6.4580/6.4900.”

Next 1-3 weeks: “On Wednesday (13 Jan, spot at 6.4500), we indicated that the outlook is mixed and we expected USD to ‘trade between 6.4100 and 6.4900’. While there is no change in our view, upward momentum is beginning to improve and a clear break of 6.4900 could lead to USD moving higher towards 6.5200. At this stage, the prospect for USD to advance is not high but it would remain intact unless the ‘strong support’ at 6.4300 is breached.”