USD/CNH: Risk now shifted to the downside – UOB

Pablo Piovano FXStreet

USD/CNH now risks further pullbacks, although a strong support emerges at 6.4400, comment FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sharp drop in USD to 6.4635 yesterday came as a surprise (we were expecting sideway-trading). Downward momentum is strong and USD could break the April’s low at 6.4615. In view of the already oversold conditions, the next support at 6.4500 is likely out of reach. Resistance is at 6.4700 followed by 6.4750.”

Next 1-3 weeks: “Two days ago (05 May, spot at 6.4830), we highlighted that while the recent negative phase in USD has ended, ‘it is too soon to expect a recovery’. We held the view that USD could trade between 6.4650 and 6.5020. We did not anticipate the rapid manner by which USD plummeted to 6.4635 yesterday. The risk has shifted to the downside again but in view of the nascent build-up in downward momentum, any weakness may find it difficult to break 6.4400. The downside risk is deemed intact as long as USD does not move above 6.4820 (‘strong resistance’ level).”

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.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold struggles to attract investors

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Strategy unveils plan allowing Bitcoin sales to fund stock buybacks, dividends and reserves

Strategy (MSTR) has unveiled a Digital Credit Framework to strengthen the company’s financial standing. Under the new framework, the world’s largest corporate holder of Bitcoin (BTC) will pivot from its previous accumulation strategy, opting to sell BTC in order to boost liquidity, fund dividend payments, execute stock buybacks, and strengthen cash reserves.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.