USD/CNH faces a tough barrier at 7.0960 – UOB

Pablo Piovano FXStreet

Further upside in USD/CNH is expected to face a strong hurdle at 7.0960 in the near term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “While our view for USD to strengthen yesterday was correct, we were of the view that ‘the major resistance at 7.0500 is still unlikely to come into view for now’. The anticipated USD strength exceeded our expectations as it soared to 7.0607 before pulling back to close at 7.0515 (+0.58%). Today, USD could continue to rise but the next major resistance at 7.0960 is likely out of reach. Support is at 7.0400, followed by 7.0250.”

Next 1-3 weeks: “Yesterday (18 May, spot at 7.0150), we reaffirmed our positive USD view and indicated that ‘the next level to watch is at 7.055’. That said, we did not quite expect USD to surpass 7.0500 so quickly (USD soared to 7.0607 in NY trade). While we continue to expect USD to strengthen, it remains to be seen if it can break above the next major resistance at 7.0960. All in all, only a break of 7.0000 (‘strong support’ level previously at 6.9750) would indicate the USD strength that started last Friday has eased."

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.