USD/CNH: Any advance is likely part of a higher range of 7.3600/7.4420 - UOB Group

Further US Dollar (USD) strength is not ruled out vs Chinese Yuan (CNH), but any advance is likely part of a higher range of 7.3600/7.4420. In the longer run, surge in momentum indicates USD is likely to continue to rise; the level to monitor is 7.4500, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD is likely to continue to rise

24-HOUR VIEW: "While we expected USD to 'rise further' yesterday, we indicated that 'given the overbought conditions, any advance is unlikely to reach 7.3800.' We did not expect the surge that sent USD soaring above 7.4000 (high of 7.4288). USD closed at 7.4265, higher by 1.08%. While further USD strength is not ruled out, deeply overbought conditions suggest any advance is likely part of a higher 7.3600/7.4420 range. In other words, USD is unlikely to break clearly above 7.4420 or below 7.3600."

1-3 WEEKS VIEW: "We indicated yesterday (08 Apr, spot at 7.3480) that while USD 'could continue to rise, it is unclear whether it can break above 7.3800.' However, USD easily broke above 7.3800 and soared above 7.4000 for the first time. The surge in momentum indicates USD is likely to continue to rise. The level to monitor is 7.4500. The upside risk will remain intact provided that the 'strong support' at 7.3100 (level was at 7.2750 yesterday) is not breached."