USD/CNH: Next on the upside comes 7.3500 ahead of 7.4000 – UOB

Extra gains in USD/CNH now target the 7.3500 barrier prior to 7.4000, comment UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann.

Key Quotes

24-hour view: “USD surged to a fresh record high of 7.3322 before closing higher by a whopping 1.37% (7.3257). Solid upward momentum is likely to lead to further advance. A break of 7.3500 would not be surprising but in view of the deeply overbought conditions, 7.4000 is unlikely to come into view for today. Support is at 7.3000 followed by 7.2800.”

Next 1-3 weeks: “Yesterday, USD cracked the major resistance at 7.3000 and jumped to a fresh record high of 7.3322. The USD strength that started about 2 weeks ago is deep in overbought territory but the rally is not showing any sign of weakness just yet. In other words, the overbought rally will most likely continue. The next resistance level of note is at 7.3500, followed by 7.4000. On the downside, a break of 7.2600 (‘strong support’ level) would indicate that the USD strength has ended.”