USD/CNH: Rising bets for a breakout of 6.8500 – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, chances for USD/CNH to break above the 6.8500 level have been on the rise as of late.

Key Quotes

24-hour view: “We expected USD to trade within a range of 6.8050/6.8350 yesterday. USD swung between 6.8062 and 6.8400 in NY trade before settling at 6.8369 (+0.20%). Despite the volatile price actions, the underlying tone has firmed somewhat and USD is likely to edger higher. That said, a break of the major resistance at 6.8500 is unlikely today. Support is at 6.8260, followed by 6.8130.”

Next 1-3 weeks: “There is not much to add to our update from Monday (13 Feb, spot at 6.8275). As highlighted, upward momentum is beginning to build and the likelihood of USD breaking above 6.8500 has increased. The next resistance level above 6.8500 remains at 6.8800. Overall, only a break of 6.7800 (no change in ‘strong resistance’ level) would indicate that 6.8500 is not coming into view.”