USD/CNH: Decline is likely part of a lower range of 7.2400/7.2800 – UOB Group

FXStreet Insights Team FXStreet

Further US Dollar (USD) weakness vs Chinese Yuan (CNH) is not ruled out, but any decline is likely part of a lower range of 7.2400/7.2800. In the longer run, USD could remain under pressure but note the pair of strong supports at 7.2400 and 7.2260, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD can remain under pressure

24-HOUR VIEW: "The sharp and swift selloff that sent USD plummeting by 0.69% (7.2535) was surprising. Note that the 0.69% drop is the second biggest one-day drop this year. The decline appears excessive, but with no signs of stabilisation just yet, further weakness is not ruled out. However, given the deeply oversold conditions, any decline is likely part of a lower range of 7.2400/7.2800."

1-3 WEEKS VIEW: Our latest narrative was from last Friday (28 Feb, spot at 7.2950), wherein the strong advance from last Thursday 'indicates there is potential for USD to rise to 7.3250.' In a sudden move yesterday, USD plunged to a low of 7.2485. The breach of our ‘strong support’ level at 7.2680 has invalidated our view. Although the sharp drop yesterday indicates USD could remain under pressure, note that there is a pair of strong supports at 7.2400 and 7.2260. To maintain the downward pressure, USD must not break above 7.2980."

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 appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.