EUR/USD: Under pressure as CNY hit new trend low, RSI reporting oversold conditions

The EUR/USD fell to 1.1320 in Asia - the lowest level since July 2017.
Chinese yuan (CNY) fell to new trend low of 6.9068, triggering a broad-based USD rally.
The sell-off in the EUR is now looking overstretched. The hourly RSI is creating a bullish divergence.

Omkar Godbole FXStreet Contributor

The Chinese yuan (CNY) fell to a new trend low of 6.9068 per US dollar in Asia, leading to a broad-based USD rally.

As a result, the EUR/USD fell to 13-month low of 1.1320, bolstering the already bearish technical setup: the common currency suffered a pennant breakdown earlier this month and closed yesterday below the all-important 200-week moving average support of 1.1356.

Hence, it seems safe to say the bears are in control and the EUR could soon drop to 1.13.

However, the 14-day relative strength index (RSI) is reporting oversold conditions. Meanwhile, the hourly relative strength index (RSI) is creating a bullish divergence. Thus, bearish momentum could wane in the next few hours.

On the data front, the US July retail sales are scheduled for release at 12:30 GMT. A better-than-expected print would only add to the bearish pressure around the EUR. On the other hand, a weak reading could help the oversold EUR regain some poise. The EUR pairs could also turn volatile during Bundesbank President Jens Weidmann's speech, scheduled at 16:00 GMT.

EUR/USD Technical Levels

Resistance: 1.1360 (200-week moving average), 1.14 (psychological level), 1.1433 (Monday's high)

Support: 1.1312 (July 5 low), 1.1285 (June 2 low), 1.1187 (61.8 percent Fibonacci retracement the rally from 1.0340 to 1.2556)

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Oversold	High
1H	Bearish	Oversold	Low
4H	Bearish	Oversold	Low
1D	Strongly Bearish	Oversold	Expanding
1W	Bearish	Oversold	Shrinking
Updated Aug 15, 04:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold sticks to modest recovery gains above $4,000 as Fed hike bets cap upside

Gold stages a modest recovery from the vicinity of a three-month low, trading above the $4,000 psychological mark through Monday’s Asian session amid a softer US Dollar. US President Donald Trump has ruled out immediate military action against Iran, triggering a modest pullback in crude oil prices. Furthermore, Federal Reserve officials have signaled no urgency to raise interest rates immediately.

Cardano's derivatives and on-chain data confirm bears in control

Cardano extends losses, trading below $0.202 after three consecutive weeks of more than 20% declines since early October. Selling pressure continues to build as weakening derivatives metrics, bearish on-chain signals and a deteriorating technical outlook point to further downside risks. Derivatives data shows a bearish bias for Cardano.

CFTC Report: WTI rally runs ahead of positioning

The week in one sentence: WTI prices surged while speculative longs were cut in the week to October 20, creating the clearest price/positioning divergence. Sterling and the Canadian Dollar led the constructive currency shift, while Yen longs also rebuilt. Speculators turned less constructive on the WTI, reducing their net exposure to around 89.3K contracts.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.