Chinese Yuan: Downside bias as momentum improves against US Dollar – UOB

FXStreet Insights Team FXStreet

United Overseas Bank’s (UOB) Senior Technical Strategist Quek Ser Leang notes that USD/CNH has broken higher, with momentum improving after Monday’s move to 6.8051 and a close at 6.8038. The bank now sees scope for a test of resistance at 6.8080 and potentially last month’s high at 6.8195, provided the pair holds above nearby support levels.

Upside risk building above 6.8080

"24-HOUR VIEW: USD rose to a high of 6.7998 on Monday. When USD was at 6.7945 yesterday, we highlighted the following: “Despite the advance, upward momentum has not increased much. However, USD could potentially rise above 6.8000. The major resistance at 6.8080 is unlikely to come under threat. Support is at 6.7900, followed by 6.7850.” We were not wrong, as after dipping briefly to a low of 6.7894, USD rose to a high of 6.8051. USD closed 0.14% higher at 6.8038. The advance has gathered momentum, and today, USD could break above the 6.8080 resistance. However, any further advance is unlikely to reach last month’s high of 6.8195. To sustain the momentum, USD must hold above 6.7960 (minor support is at 6.8000)."

"1-3 WEEKS VIEW: We have held the same view since last Wednesday (01 Jul, spot at 6.7920), when we highlighted that USD “is likely to trade in a range between 6.7750 and 6.8080.” Yesterday, USD rose to a high of 6.8051. Upward momentum is starting to build, and if USD closes above 6.8080, it is likely to head higher toward last month’s high of 6.8195. The upside risk will remain intact as long as USD holds above 6.7830 (‘strong support’ level)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold eyes Fed Minutes for fresh impetus after holding $4,100

Gold is fading the previous rebound in Asia on Wednesday, struggling near $4,150. US Dollar bounces in sync with Oil prices and US Treasury yields ahead of FOMC Minutes. From a short-term technical view, Gold remains a ‘sell-on-bounce’ trade.

USD/INR remains broadly muted after RBI’s 25 bps hike in Repo Rates to 5.5%

The Indian Rupee has not shown a significant reaction against the US Dollar, following the RBI’s monetary policy decision. The RBI has raised its key Repo Rate by 25 bps to 5.5%. India’s central bank shifts policy stance to 'calibrated tightening' from 'neutral'.

France's government could fall over the budget. Here's what that would actually mean for the Euro

The Euro (EUR) is trading at its lowest level since May 2025, nearly 7% below its January peak, and France's government could fall over its 2027 budget before the end of November. A French government falling hasn't moved the Euro much by itself, so the risk to price is narrower: France losing its place under the emergency safety net the European Central Bank (ECB) keeps for government bonds.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.