In this article, we have covered the highlights of global market news about the USD/CNY, EUR/USD, USD/KRW and NZD/USD.
USD/CNY to fall more if it falls below 7.02 – SocGen
At 7.19, the USD/CNY currency pair came close to reaching its top for 2019. Since then, the pair has made a downward reversal, and the analysts at Société Générale believe that it can continue falling on a drop that occurs lower than 7.02.
“USD/CNY has encountered significant opposition close to the upper boundary of a multiyear channel at 7.26, which has resulted in the formation of a weekly shooting star. This is not a pattern of reversal but rather one that indicates momentary fatigue.
“An first downturn seems to be taking form; first support is located around 7.02, which is the 23.6% retracement from 23.6%. In the event that this breaks, there is the potential for a further downward move.”
“7.17/7.19 is immediate resistance zone.”
EUR/USD will remain offered towards the 0.9540 September lows this week – ING
The EUR/USD currency pair continues to be subject to a low level of negative pressure on Monday. The economists at ING anticipate that the world’s most widely traded currency pair will soon trade back to back at 0.95.
“The energy crisis is driving a drastic transition in the export-oriented economic framework of the eurozone, a theme that will impede a speedy return to above-parity levels in EUR/USD,” said the European Central Bank (ECB). After all, our BEER FX equilibrium model has repeatedly demonstrated that the EZ-US terms of trade differential (which is calculated by dividing the price of exports by the price of imports) are the primary determinant of natural EUR/USD medium-term swings. This differential currently demonstrates that the pair is not undervalued.
“Much like the Federal Reserve, it’s difficult to envision the ECB would want to make a significant shift in the hawkish language it’s been using at this time. However, unlike the Federal Reserve, the European Central Bank’s (ECB) policy of tightening monetary policy is not supporting the euro’s value against the US dollar, and we anticipate that the EUR/USD exchange rate will remain below the 0.9540 level reached in September this week.
Credit Suisse expects the USD/KRW to rise to 1,597/1,600.
The USD/KRW exchange rate has broken out of its long-term channel. According to the opinions expressed by experts working for Credit Suisse, this rise prompts ideas of a probable advance to 1,597/1,600.
“The USD/KRW pair saw a significant breakthrough above its long-term channel in August, which puts the market in position for an aggressive run upward. Our fundamental USD/KRW outlook remains positive, even though the current pullback is considered a short stop as the RSI hit oversold levels across all periods.
We believe that a further rise to the 78.6% retracement of the uptrend from 2009 to 2014, which is located around 1,471, is likely to follow. Should we also see a straight break higher here, this would boost the possibility of finally hitting 1,597/1,600, which was the high point for 2009.”
NZD/USD Price Analysis: targets a new annual low while pushing through 0.5590 support.
Early Monday morning in Europe, sellers attacked a support line that had been in place for a week’s worth of trading at 0.5590. By doing so, the Kiwi pair experiences a decline for the third day in a row while also falling to levels that have not been seen since September 30.
Given that the quotation has been trading below both the 100-
SMA and the 50-SMA for an extended period and that the MACD signals are negative, the prices of the NZD/USD currency pair are likely to overcome the 0.5590 immediate support level.
After that, the recently flashing multi-month low close to 0.5565 can attract the attention of the bears.
Suppose the NZD/USD prices continue to be low after passing 0.5565. In that case, a downward trajectory towards the March 2020 bottom around 0.5470 and then to the 61.8% Fibonacci Expansion (FE) of September-October moves near 0.5445 can’t be ruled out. This scenario is only possible if the NZD/USD prices remain low beyond 0.5565.
Alternately, the 50- and 100-simple moving averages are protecting the immediate rebound of the NZD/USD pair at 0.5685 and 0.5755, respectively.
Even if the quotation can climb higher than 0.5755, it still has to surpass 0.5815, which is the monthly high, to win over the buyers.
The NZD/USD exchange rate is ready to test the multi-month low established in September.
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