EUR/USD: Set to move towards 1.1200 – UOB Group

FXStreet Insights Team FXStreet

The likelihood of the Euro (EUR) breaking above 1.1200 has increased, UOB Group FX analysts note.

Bulls may strive to touch 1.1200

24-HOUR VIEW: “While we expected EUR to edge higher last Friday, we held the view that it “is unlikely to be able to break the major resistance at 1.1200.” Our view did not materialise as EUR traded in a quiet manner between 1.1135 and 1.1181, closing largely unchanged at 1.1162 (+0.01%). Momentum indicators are turning neutral, and EUR could continue to trade in a quiet manner. Expected range for today: 1.1135/1.1185.”

1-3 WEEKS VIEW: “Our update from last Friday (20 Sep, spot at 1.1160) remains valid. As highlighted, the likelihood of EUR breaking above the year-to-date high of 1.1200 has increased. However, it remains to be seen if EUR has enough momentum to reach the next resistance at 1.1230. Overall, only a breach of 1.1100 (‘strong support’ level previously at 1.1060) would indicate that the upward pressure that started early last week (as annotated in the chart below) has faded.”

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 breaks below 0.7000 ahead of inflation data

AUD/USD has accelerated its downward trend on Tuesday, breaching below the key 0.7000 yardstick ahead of the opening bell in Asia on Wednesday. Indeed, spot has retreated for the second day in a row despite the hawkish hike by the RBA early on Tuesday and in response to the continuation of the move higher in the Greenback. Looking ahead, all the attention will be on the release of Australia’s inflation data on Wednesday.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold trims gains; back toward $4,150

Gold now surrenders some of its initial advance and retests the $4,150 zone per troy ounce on Tuesday. Meanwhile, the move higher in the yellow metal comes despite the firmer US Dollar and rising US Treasury yields across the board, while escalating geopolitical tensions appear to limit the downside potential.

XRP advances within a robust technical structure

Ripple (XRP) shows signs of stabilizing after reclaiming support at $1.50 on Tuesday. A robust technical structure underpins the token’s short to medium-term bullish outlook. Still, XRP is not out of the woods yet, as profit-taking and buyer exhaustion could weigh on price action and extend the recent correction from September highs around $1.66.

RBA recap: Rate hikes are on the table as demand stays too strong

The Reserve Bank of Australia unanimously tightened monetary policy, warning that inflation remained too high and that several upside risks had begun to materialise. Governor Michele Bullock said the Board would raise rates again if necessary.

Silver is more volatile than Gold ahead of PCE and NFP. This chart shows the positioning gap

The market’s attention is focused on American data this week, but there’s something only those with a trained eye may be looking at: Gold and Silver positioning gap. Financial markets are moving on fears, mostly related to persistently high energy prices driven by the Middle East war. Sure, the US Dollar (USD) is strong, but at what cost?