Further advance could see USD/CNH testing the 7.3500 zone in the short-term horizon according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: Yesterday, we held the view that USD “is likely to rise further even though it is unlikely to reach 7.3500.” We indicated that “there is another resistance at 7.3300.” USD did not rise much further as it rose to 7.3278, dropped to 7.3000, and then closed at 7.3198 (+0.19%). While there is no further improvement in momentum, we continue to expect USD to rise further. However, 7.3500 is still likely out of reach today. On the downside, if USD breaks below 7.3050, it would indicate that the current upward pressure has faded.

Next 1-3 weeks: We maintain our view from yesterday (06 Sep, spot at 7.3100), wherein the risk for USD has shifted to the upside towards 7.3500. The upside risk is intact as long as USD stays above 7.2800.  

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