USD/CNH now looks to 7.1960 – UOB
FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang suggest the next target for USD/CNH emerges at the 2020 high at 7.1960.
24-hour view: “USD rose above last Friday’s high of 7.1472 during Asian hours. While the rapid rise appears to be overextended, the rally in USD is not showing signs of weakening. In other words, the risk is for further USD strength. That said, the 2020 high of 7.1960 is unlikely to come into view for today (there is another resistance at 7.1800). On the downside, 7.1210 is expected to hold any intraday pullback (minor support is at 7.1300).”
Next 1-3 weeks: “Our latest narrative was from last Thursday (22 Sep, spot at 7.0850). As indicated, USD is ready for the next up leg towards 7.1500, possibly to the 2020 high of 7.1960. USD breached 7.1500 during early Asian hours today. All eyes are on the 2020 high of 7.1960 now. A breach of the major and long-term resistance could lead to an upward acceleration. Overall, only a break of 7.0750 (‘strong support’ level was at 7.0400 last Friday) would indicate that the USD strength that started more than a week ago has come to an end.”