USD/CNH: Brief break below 7 triggers AXJs – OCBC

FXStreet Insights Team FXStreet

Optimism from China’s recent support measures and renewed USD softness have manifested onto gains in the CNH, OCBC’s FX strategists Frances Cheung and Christopher Wong note.

USD softness manifests as gains in the CNH

“USD/CNH briefly traded a low of 6.9950 before rebounding. The big decline in USDCNH past key psychological level saw various USD/AXJs trade lower. For instance, USD/SGD traded close to 1.28-lows while USD/MYR went below 4.11 briefly (vs. close of 4.1578 yesterday). A combination of further gains in RMB, growth in the region looking well, Fed easing cycle and softer USD should continue to benefit AXJ FX.”

“On the daily fix, USD/CNY was set at 7.0202, largely in line with Bloomberg consensus for 7.0206. Markets were earlier watching if policymakers will explicitly push back against RMB appreciation (by signaling via the fix) and it appeared there was no strong push back. The momentum forward for RMB should take cues from China equity markets.”

“More sustained gains should see RMB trade with a tighter correlation. USD/CNH was last at 7.0130 levels. Bearish momentum on daily chart intact while RSI is near oversold conditions. Intra-day retracement not ruled out. Resistance at 7.0330 (50% fibo), 7.07 levels. Bias to sell rallies. Support at 6.99, 6.9540 (61.8% fibo).”

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 jumps to 0.7050, fresh one-month top after hot Australian CPI

AUD/USD attracts buyers for the second straight day on Wednesday, rising to a fresh high since September 23 during the Asian session. A hot Australian CPI print reaffirmed bets for an imminent RBA rate hike in November and boosted the Australian Dollar. Meanwhile, the US Dollar pauses after a three-day rally to a near two-week high ahead of the crucial FOMC rate decision, lending additional support to the currency pair.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold drops as oil price rebounds, Fed’s policy eyed

Gold slips 0.3% to near $4,050 in the Asian trade on Wednesday, as oil prices bounce back after a two-day correction. The precious metal is expected to face high volatility as the Federal Reserve is scheduled to announce the monetary policy later in the day at 18:00 GMT.

Bitcoin, Ethereum and XRP recover as Big Tech earnings take center stage

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) extend their recovery on Wednesday as investors turn their attention to major technology companies' earnings reports. Microsoft and Alphabet are due to report their Q3 earnings on Wednesday, followed by Amazon on Thursday.

FOMC outlook: Why keeping rates unchanged might not be enough

Tomorrow's FOMC meeting could be quite interesting, even if the Federal Reserve decides to leave interest rates unchanged. According to the latest market expectations, there is currently a 92.8% probability that rates will remain at 3.75–4.00%, while the probability of another 25 basis point increase stands at just 7.2%.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.