The likelihood of a probable test of 7.0960 in USD/CNH now appears somewhat dwindled according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
24-hour view: “Yesterday, we expected USD to ‘trade in a lower range of 7.0080/7.0400’. However, USD rose to a high of 7.0530. Despite the advance, upward momentum has not improved much. That said, there is room for USD to edge higher today even though it is unlikely to challenge last Friday’s high of 7.0750 (there is another resistance at 7.0600). Support is at 7.0350, followed by 7.0230.”
Next 1-3 weeks: “Our update from yesterday (22 May, spot at 7.0215) is still valid. As highlighted, short-term upward momentum is beginning to fade and the chance of USD rising to 7.0960 this time around has diminished. However, only a break of 7.0000 (no change in ‘strong support’ level) would indicate the USD strength that started more than a week ago has ended.”