Extra gains could encourage USD/CNH to challenge the 6.9750 level in the short term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Last Friday, we expected USD to strengthen further but we were of the view that ‘the major resistance at 6.9750 is likely out of reach today’. Our view turned out to be correct as USD rose to a high of 6.9735. Conditions are overbought and upward momentum is showing signs of slowing, albeit tentatively. Today, we do not expect USD to advance much further; it is more likely to trade in a range of 6.9570/6.9750.”

Next 1-3 weeks: “Last Friday, we expected USD to strengthen further but we were of the view that ‘the major resistance at 6.9750 is likely out of reach today’. Our view turned out to be correct as USD rose to a high of 6.9735. Conditions are overbought and upward momentum is showing signs of slowing, albeit tentatively. Today, we do not expect USD to advance much further; it is more likely to trade in a range of 6.9570/6.9750.”