EUR/USD tries to stabilise while USD/JPY and USD/CNH keel over
Outlook on EUR/USD, USD/JPY and USD/CNH following eight straight weeks of US dollar gains.
EUR/USD continues to trade in 3-month lows
EUR/USD's descent on weak Euro Zone growth took it to a three-month low at $1.0687 before the cross tried to level out last week. The fact that the US dollar saw an eight-week winning streak - its longest since 2014 - amid rising US rate expectations also pushed the currency pair down.
A drop through Thursday’s $1.0687 low would eye the May low at $1.0636.
Minor resistance sits around the $1.0766 August low and along the 200-day simple moving average (SMA) at $1.0826 as well as at the July low at $1.0834.
USD/JPY drops on hawkish BoJ comments
USD/JPY has swiftly come off last week’s 11-month high at ¥147.87 on comments by the governor of the Bank of Japan (BoJ) Kazuo Ueda. He stated that the central bank’s negative rates policy could be ended by the start of 2024 if wage increases were to continue.
USD/JPY thus slid back to its July-to-September uptrend line at ¥145.98 which offers support. Were it to give way, the June peak at ¥145.07 may be revisited.
Minor resistance can now be encountered between the mid-to-late August highs at ¥146.56 to ¥146.74 ahead of the 29 August high at ¥147.37.
USD/CNH comes off 11-month high
USD/CNH's rally to its 11-month high at CN¥7.3681 on Friday, close to its October 2022 peak at CN¥7.3773, has been followed by a swift sell-off as Country Garden’s debt extension woes continue and consumer prices inch higher by 0.1% year-on-year (YoY) in August.
A stronger-than-expected yuan fixing, and comments by China’s central bank in which it said it will take action to correct one-sided moves in its currency whenever needed and that it is confident in keeping the yuan stable, pushed USD/CNH down.
On Monday morning the cross dipped to CN¥7.292, a fall through which would put the June peak at CN¥7.2856 on the map. Further down the July-to-September uptrend line at CN¥7.267 might also offer support. Minor resistance sits at the 21 August high at CN¥7.3361 ahead of the CN¥7.3497 August peak.
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