There are rising chances for USD/CNH to break above the 7.2000 level in the near term, comment Economist Lee Sue Ann and Markets Strategist Quek ser Leang at UOB Group.

Key Quotes

24-hour view: Our expectation for USD to break 7.1800 yesterday did not materialize as it traded in a range of 7.1512/7.1785. However, USD broke above 7.1800 in early Asian trade today. The price actions suggest USD is likely to advance, even though a sustained rise above 7.2000 appears unlikely. On the downside, a breach of 7.1550 (minor support is at 7.1660) indicates USD is not advancing further.

Next 1-3 weeks: We continue to hold the same view as yesterday (14 Jun, spot at 7.1740). As highlighted, upward momentum has increased and the chance of USD breaking above 7.2000 has improved. Looking ahead, the next level to watch above 7.2000 is 7.2200. On the downside, a break of 7.1400 (‘strong support’ level previously at 7.1330) would indicate that USD is not strengthening further