USD/CNH: Extra gains seen above 6.4880 – UOB

USD/CNH needs to close above the 6.4880 level to allow for extra gains to, initially, 6.5000, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that USD ‘could edge lower but any weakness is unlikely to break the support at 6.4630’. However, USD dropped to 6.4545 before rebounding strongly. The strong rebound amid oversold conditions indicates that USD is unlikely to weaken further. For today, USD is more likely to consolidate and trade between 6.4630 and 6.4820.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (22 Sep, spot at 6.4765). As highlighted, further USD strength is not ruled but USD has close above 6.4880 before a sustained advance can be expected (next resistance is at 6.5000). On the downside, a break of 6.4500 (no change in ‘strong support’ level from yesterday) would indicate that USD is not ready to move to 6.5000 just yet.”