USD/CNH risks further weakness near term – UOB

Pablo Piovano FXStreet

Further selling pressure appears likely in USD/CNH in the next weeks, note UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we expected USD to ‘trade sideways within a range of 6.7690/6.8000’. USD subsequently rose to a high of 6.7975, dropped to 6.7629 before closing at 6.7676 (-0.28%). Downward momentum is beginning to build and the risk for USD today is to the downside. While a break of the major support at 6.7500 would not be surprising, the next support at 6.7000 is unlikely to come into view. On the upside, a breach of 6.7920 (minor resistance is at 6.7800) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “There is not much to add to our update from Tuesday (10 Jan, spot at 6.7850). As highlighted, USD is likely to continue to weaken and a break of 6.7500 will shift the focus to 6.7000. Overall, only a breach of 6.8250 (‘strong resistance’ level was at 6.8350 yesterday) would indicate that the USD weakness that started last week has ended.”

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 remains bid, focus stays on 1.1900

EUR/USD has broken its two-day run of losses and is ticking modestly higher on Thursday, hovering around the 1.1880 area as the US Dollar struggles to find clear direction. Weekly Initial Jobless Claims rose more than expected, taking a bit of shine off the Greenback, but markets are largely in wait-and-see mode ahead of Friday’s US CPI release.

GBP/USD sticks to the bid bias, still below 1.3700

GBP/USD is trading with decent gains around 1.3650 on Thursday. Indeed, Cable is attempting to shake off the weakness seen earlier in the week amid another choppy session for the Greenback, while a run of disappointing UK data has so far failed to derail the pair’s tentative recovery.

Gold recedes slightly, trades below $5,100

Gold remains stuck in choppy trade on Thursday, deflating marginally just below the $5,100 mark per troy ounce as the US Dollar drifts without a clear trend. Softer US Treasury yields across the curve are offering some support, but with markets treading carefully ahead of Friday’s US CPI release, conviction remains limited and price action continues to look hesitant.