USD/CNH: Next support at 7.2500 is unlikely to come into view – UOB Group

FXStreet Insights Team FXStreet

Provided that 7.2950 is not breached, there is a chance for US Dollar (USD) to drop below 7.2685 against CNH (Chinese Yuan). The next support at 7.2500 is unlikely to come into view. In the longer run, USD must break and remain below 7.2500 before a sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Below 7.2500, a sustained decline is likely

24-HOUR VIEW: "We pointed out yesterday that 'momentum indicators remain flat, and we continue to expect USD to trade in a range between 7.3000 and 7.3200.' However, in a sudden move, USD plunged and reached a low of 7.2685 in late NY trade. Although deeply oversold, the weakness has not stabilised. Today, provided that 7.2950 (minor esistance is at 7.2870) is not breached, there is a chance for USD to dip below the 7.2685 low before stabilisation is likely. The next support at 7.2500 is unlikely to come into view."

1-3 WEEKS VIEW: "We highlighted last Friday (07 Feb, spot at 7.2865) that 'while the outlook remains mixed, the decreasing volatility over the past couple of days suggests USD could trade in a narrower range of 7.2500/7.3300.' Yesterday, USD fell sharply to a low of 7.2685. There has been an increase in momentum, but not enough to indicate the start of a sustained decline. To continue to decline, USD must break and remain below 7.2500. The likelihood of USD breaking clearly below 7.2500 will increase in the next few days as long as 7.3070 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.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

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 sticks to intraday losses around $4,000 as USD stays firm ahead of FOMC

Gold maintains its offered tone through the first half of Tuesday’s European session, with bearish traders looking to extend the slide further below the $4,000 psychological mark amid a broadly firmer US Dollar. The precious metal, however, holds above the three-month low touched on Monday, as traders refrain from placing aggressive directional bets and opt to wait for the outcome of the two-day FOMC policy meeting on Wednesday.

Pi Network stalls as weak crypto sentiment caps recovery

Pi Network (PI) holds steady above $0.0760 at press time on Tuesday, stalling after a roughly 2% rebound the previous day. The broader market's weak sentiment and reduced trading volume weigh on the PI token. The technical outlook is bearish, with price capped below a long-term resistance trendline and weak momentum.

France tests the Euro's nerve: What the OAT spread is telling FX traders

France's 10-year borrowing premium over Germany hit its widest since the 2011 debt crisis last week. With public spending above 57% of GDP, unrest on the streets and a presidential election next spring, cuts look unlikely. If Paris cannot trim, the bill may be paid quietly through financial repression.

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.