USD/CNH: Chance of dropping below July’s low of 7.1435 – UOB Group

FXStreet Insights Team FXStreet

US Dollar (USD) could drop below July’s low of 7.1435, but it might not be able to maintain a foothold below this level. In the longer run, rapidly increasing downward momentum indicates USD could drop below 7.1435; it is unclear now if 7.1290 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Rapidly increasing downward momentum

24-HOUR VIEW: "While we indicated yesterday that 'there is scope for USD to drop further,' we were of the view that 'any decline is likely part of a lower range of 7.1630/7.1830.' However, USD broke below 7.1630 and dropped sharply to a low of 7.1492. USD rebounded from the low to close at 7.1578, down by 0.20%. While conditions are oversold, USD could drop below July’s low of 7.1435 today. However, given the oversold conditions, USD might not be able to maintain a foothold below this level. To keep the momentum, USD must hold below 7.1710, with minor resistance at 7.1630."

1-3 WEEKS VIEW: "We turned slightly negative on USD yesterday (25 Aug, spot at 7.1740). We indicated that it 'may edge lower, but any decline is unlikely to break clearly below 7.1600.' However, USD easily broke below 7.1600 and dropped to a low of 7.1492. The rapidly increasing downward momentum indicates USD could drop below July’s low of 7.1435. Currently, it is unclear if the next support at 7.1290 is within reach. Overall, we will maintain our negative view as long as 7.1800 (‘strong resistance’ level was at 7.1860 yesterday) is not breached."

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.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

Euro clings to the bid bias above 1.1500

EUR/USD has picked up pace, reversing Monday’s decline and advancing past the 1.1500 barrier on Tuesday. In the meantime, hopes for a diplomatic solution to the Middle East crisis keep the US Dollar under modest downside pressure, helping spot in its recovery.

Coinbase Bitcoin Premium Index extends historical negative streak as risk appetite deteriorates

The Coinbase Bitcoin Premium Index extends its negative streak to 78 consecutive days on Tuesday, the longest on record. This reading comes amid the ongoing bearish trend, which has seen Bitcoin (BTC) drop by almost 50% from its record high to trade around $64,000.

Why the WTI sell-off may be hiding a supply warning

Prices for the barrel of the American Oil benchmark have fallen sharply as hopes of a US-Iran agreement have resurfaced, but a deeply backwardated Oil curve, tight Cushing stocks and light speculative positioning all warn that the sell-off may have gone too far.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.