USD/CNH faces firm hurdle at 6.4070 – UOB

Further upside in USD/CNH is expected to meet a tough barrier at 6.4070 in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We noted yesterday that ‘momentum indicators are mostly flat’ and we expected USD to ‘trade sideways within a range of 6.3770/6.3970’. Our view for sideway-trading was not wrong even though USD traded within a narrower range than expected (6.3835/6.3948). The quiet price actions offer no fresh clues and USD could continue to trade sideways. Expected range for today, 6.3800/6.3970.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (23 Nov, spot at 6.3865). As highlighted, while shorter-term momentum appears to be building, USD to move and stay above 6.3970 soon or the build-up in momentum would fizzle out quickly. On the downside, a breach of 6.3750 (no change in ‘strong support’ level) would indicate that the build-up in momentum has fizzled out.”