USD/CNH: A clear break below 7.1700 is unlikely – UOB Group

FXStreet Insights Team FXStreet

There is a chance for US Dollar (USD) to test 7.1700; a clear break below this level is unlikely. In the longer run, downward momentum is building; for a continued decline, USD must first close below 7.1700, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum is building

24-HOUR VIEW: "In the early Asian session yesterday, we detected 'a slight increase in downward momentum.' We expected USD to 'edge lower to 7.1780,' but we pointed out that 'given the mild downward pressure, any further decline is unlikely to threaten the support at 7.1700.' We were not wrong, as USD fell to a low of 7.1758. Although there has been no significant increase in downward momentum, there is a chance for USD to test 7.1700 today. Based on the current momentum, a clear break below this level is unlikely. Resistance levels are at 7.1850 and 7.1900."

1-3 WEEKS VIEW: "In our update from Monday (11 Aug, spot at 7.1880), we highlighted that 'while we continue to expect range trading, a narrower range of 7.1700/7.2100 is likely enough to contain the price movements for now.' Yesterday, USD dropped to a low of 7.1758. Downward momentum is building, but for a continued decline, USD must first close below 7.1700. The probability of USD closing below 7.1700 will increase from here as long as 7.1950 (‘strong resistance’ level) holds. Looking ahead, if USD closes below 7.1700, the next level to watch is 7.1580."

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.

160.80: Japanese Yen remains close to nearly two-year lows

USD/JPY inches lower after four days of gains, trading around 160.60 during the Asian hours. The USD/JPY pair surged to 160.80 the previous day, marking its highest level since July 2024 and significantly heightening speculation that Japanese authorities could soon intervene to support the struggling Yen.

Australian Dollar remains in positive territory after paring recent gains

AUD/USD pares its daily gains, remaining in the positive territory and trading around 0.7010 during the European hours. The pair appreciated as the Australian Dollar received support from prevailing hawkish sentiment surrounding the Reserve Bank of Australia’s policy outlook.

Gold drops to daily lows near $4,200

Gold struggles to attract buyers on Thursday, trading closer to the $4,200 mark per troy ounce. The yellow metal adds to Wednesday’s pullback and slips back to multi-day lows in response to the stronger US Dollar following the Fed’s hawkish hold on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP pare losses on increasing bets of Fed tighter monetary policy

Cryptocurrency prices are broadly moderating downwards on Thursday, as market participants assess the impact of the Federal Reserve’s (Fed) hawkish monetary policy stance.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.

The next big AI trade may not be about chips or software

Artificial intelligence has already created some of the biggest winners in modern market history. Chipmakers have surged, data centre construction is booming, and electricity demand forecasts are changing globally.