In this article, we have covered the highlights of global market news about the USD/CHF, USD/CNY, EUR/USD and the EUR/GBP.
USD/CHF approaches weekly high; bulls anticipate sustained gain over 50 DMA.
On Friday, the USD/CHF pair attracts new bids and reaches a brand-new weekly high in the early European session. Bulls, on the other hand, find it difficult to seize the opportunity or get acceptance above the 50-day SMA, and the intraday move-up pauses just before the mid-0.9600s.
The US dollar is once again in demand and recovers from an early decline to a multi-day low, which ends up being a major driver of the USD/CHF pair’s upward movement. The USD continues to be supported by expectations that the Federal Reserve will raise interest rates more quickly in order to control inflation. The Tuesday’s higher US CPI data confirmed the wagers.
In fact, the markets have already factored in the prospect of a full 100 bps rate rise at the forthcoming FOMC policy meeting on September 20–21 and a second enormous 75 bps increase in November. This continues to be favourable for the high US Treasury bond rates, which support the USD/CHF pair and serve as a tailwind for the US dollar.
Nevertheless, the risk-off impetus, which is shown by a new leg down in the stock markets, pushes some haven flows into the Swiss franc and restricts gains for the USD/CHF pair. The market’s mood is still shaky due to worries that a worse economic slowdown would result from higher interest rates and challenges brought on the recent COVID-19 restrictions in China.
USD/CNY should continue its ascent towards the next resistance level of 7.0350 – OCBC
USD/CNY has surpassed seven figures. OCBC Bank economists see further gains for the pair as they aim for resistance at 7.0350.
Daily momentum is somewhat positive, and RSI is rising. Upside risks are coming.
“7.0350, 7.05. Resistance.”
Support at levels of 7.00 and 6.9870.
The standard was increased to 6.93 levels from 6.91, although PBoC continued to depend on daily fix to regulate and direct RMB fluctuations. We once again stress that a stronger fix would remain in place but would only be able to moderate the rate of RMB depreciation.
EUR/USD: The 1.00 level may serve as an anchor in the next days – ING
Christine Lagarde, president of the European Central Bank (ECB), will speak to us today. In any case, ING experts predict that the EUR/USD will have difficulty increasing.
“ECB officials’ post-meeting remarks have so far been on the hawkish end of the spectrum, and we don’t see any reason for Lagarde to depart from this stance today. We’ll be paying particular attention to how the recent energy bill caps adopted by EU countries will be included into the ECB’s policy assessment since this might lead to more division between the hawks and doves in the Governing Council.
“Despite the recent drop in gas prices, the euro has shown a lower sensitivity to ECB communication lately, and the uncertain risk environment coupled with a strong dollar may keep EUR/USD upside restricted for the time being.”
Gains in the euro/pound might be limited by the level of 0.8750, according to ING.
EUR/GBP has reached an 18-month high. However, ING experts predict that the pair will struggle around the 0.8750 level.
The Bank of England may provide some support for the pound next week.
“Despite the Fed rate forecasts’ apparently inevitable upward revision, the BoE’s price has plateaued, now at 65 basis points for the September meeting. Despite a broad climate that remains somewhat unwelcoming for pro-cyclical currencies and domestic growth uncertainties that are likely poised to maintain a lid on a significant GBP rebound, we now see a pretty high possibility of a 75 bps increase next week, which might provide sterling some aid.
“The EUR/GBP rise from this morning may have trouble rising beyond the 0.8750 level.”
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