USD/CNH: Brief break below 7 triggers AXJs – OCBC

FXStreet Insights Team FXStreet

Optimism from China’s recent support measures and renewed USD softness have manifested onto gains in the CNH, OCBC’s FX strategists Frances Cheung and Christopher Wong note.

USD softness manifests as gains in the CNH

“USD/CNH briefly traded a low of 6.9950 before rebounding. The big decline in USDCNH past key psychological level saw various USD/AXJs trade lower. For instance, USD/SGD traded close to 1.28-lows while USD/MYR went below 4.11 briefly (vs. close of 4.1578 yesterday). A combination of further gains in RMB, growth in the region looking well, Fed easing cycle and softer USD should continue to benefit AXJ FX.”

“On the daily fix, USD/CNY was set at 7.0202, largely in line with Bloomberg consensus for 7.0206. Markets were earlier watching if policymakers will explicitly push back against RMB appreciation (by signaling via the fix) and it appeared there was no strong push back. The momentum forward for RMB should take cues from China equity markets.”

“More sustained gains should see RMB trade with a tighter correlation. USD/CNH was last at 7.0130 levels. Bearish momentum on daily chart intact while RSI is near oversold conditions. Intra-day retracement not ruled out. Resistance at 7.0330 (50% fibo), 7.07 levels. Bias to sell rallies. Support at 6.99, 6.9540 (61.8% fibo).”

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.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.