UOB’s Quek Ser Leang notes that after a prior rise in USD/CNH, upward momentum has now faded, with the pair expected to trade between 6.7950 and 6.8100 in the near term. The analyst reiterates that a close above 6.8080 would open the way toward 6.8195, while maintaining that upside risk persists as long as USD/CNH holds above 6.7830.

Upside risk while support holds

"24-HOUR VIEW: After USD rose as we expected on Tuesday, we highlighted the following yesterday: “The advance has gathered momentum, and today, USD could break above the 6.8080 resistance. However, any further advance is unlikely to reach last month’s high of 6.8195. To sustain the momentum, USD must hold above 6.7960 (minor support is at 6.8000).” We were not wrong, as USD subsequently dipped to 6.7984, rose to 6.8101 before easing to close largely unchanged at 6.8061 (+0.03%). Upward momentum has faded, and today, USD is likely to trade in a range between 6.7950 and 6.8100."

"1-3 WEEKS VIEW: After expecting USD to “trade in a range between 6.7750 and 6.8080” for a week, we highlighted yesterday (08 Jul, spot at 6.8050) that “upward momentum is starting to build, and if USD closes above 6.8080, it is likely to head higher toward last month’s high of 6.8195.” We added, “the upside risk will remain intact as long as USD holds above 6.7830 (‘strong support’ level).” Our view remains unchanged."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)