In this article, we have covered the highlights of global market news about the USD/CNH, USD/JPY, AUD/USD and GBP/USD.

USD/CNH: A sustained decline below 6.7000 is improbable, according to UOB

A convincing break of 6.7000 in the USD/CNH remains improbable, according to economist Lee Sue Ann and market strategist Quek Ser Leang at UOB Group.

“Yesterday, we indicated that USD ‘may break the main support at 6.7500,” according to the 24-hour outlook. We continued the next support at 6.7000 is unlikely to come into view. Our assessment was accurate since the USD fell to a low of 6.7250. Even if there has been a sizable decrease, the downward trend has not changed much. While the USD can fall below 7.0000, it is doubtful that it will do so consistently. Overall, the only way to tell whether the USD’s weakness has steadied is if it breaches 6.7620 (a minor resistance level at 6.7480).

Next 1-3 weeks: “Since last week, we have anticipated a decline in the USD. A breach of 6.7500 will cause attention to turn to 6.7000, as we predicted in our most recent narrative from Tuesday (10 January, spot at 6.7850) when the USD declined. Yesterday in New York trading, the USD breached 6.7500 and fell as low as 6.7250. Even while there is little chance of a prolonged collapse below 6.7000 after such a steep decrease over so little time, we still anticipate USD weakening. On the other side, a break of 6.7920 (the previous day’s “strong resistance” level was at 6.8250) would suggest that the USD’s weakening has peaked.

The USD/JPY exchange rate continues to decline, reaching a low point not seen since late May at 128.00.

Early in the European session, the USD/JPY pair broke down from its intraday consolidative range and plunged to its lowest point since late May. The pair is now trading slightly over the 128.00 level and is susceptible to continuing its downward trend.

The USD/JPY pair falls for the second day in a row as the US Dollar fails to benefit from its slight rebound and hovers close to a seven-month low. The US consumer inflation data published on Thursday increased the likelihood that the Fed would tone down its aggressive posture. Additionally, several FOMC members supported the argument for a lesser 25 bps lift-off in February and are still putting pressure on the dollar.

On the other hand, expectations that the Bank of Japan (BoJ) would end its ultra-loose monetary policy in 2023 strengthen the Japanese Yen. Additionally, according to sources on Thursday, the BoJ will examine the negative impacts of its ultra-loose policy and may take action to rectify yield curve abnormalities. As a result, the 10-year Japanese government bond has risen to its highest level since mid-2015, further strengthening the JPY.

AUD/USD: A rise over 0.7000 is on the way – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group believe that additional gains might soon push the AUD/USD pair back over the 0.7000 resistance level.

24-hour view: “We anticipated the Australian dollar would rise yesterday, but we also believed that any advance would be met with strong resistance near 0.6950. However, in NY trading, AUD quickly overcame 0.6950 as it climbed to a high of 0.6984. Despite the progress, the rising momentum has mostly stayed the same. However, AUD may move over 0.7000 if it maintains a position above 0.6920 (a minor support level is around 0.6940). Although AUD may surpass 0.7000, it is not anticipated to test the next significant barrier at 0.7070.

In the next one to three weeks: “Our most recent narrative was from Tuesday (10 January, spot at 0.6910) when we emphasized that although momentum continues to lead to a higher AUD, it must break and remain above 0.6950 before a rise to 0.7000 is possible. The Australian dollar rose beyond 0.6950 before ending the day at 0.6967 (+0.88%).

The price movements indicate that AUD is most likely to rise over 0.7000. The next obstacle at 0.7070 is likely to be in sight very soon, as there needs to be a discernible increase in momentum. On the downside, a break of 0.6890 (the previous day’s “strong support” level was at 0.6835) would signal that the Australian dollar is not gaining any further.

GBP/USD: Continued focus on UOB at 1.2270

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group believe that GBP/USD has to break above the 1.2270 level to allow for more gains shortly.

View for the next 24 hours: “We noted yesterday that GBP may continue to trade sideways, but a breakthrough of the 1.2200 barriers may lead to a rapid surge to 1.2270′. Although GBP reached 1.2200, the expected rapid surge did not occur as GBP traded choppily in the NY session (the high was 1.2248). Although GBP is expected to trade with an upward tilt today, rising momentum has somewhat improved, and it is doubtful that it will breach 1.2270. Support is found at 1.2175, then 1.2140.

Within the next three weeks: “On Tuesday (10 January, spot at 1.2180), we emphasized that there are now more chances for GBP to overcome the key barrier. We still share the same opinion even if GBP hasn’t been able to move much in the right direction. However, to maintain the momentum, GBP must break 1.2270 in the next few days; otherwise, the likelihood of additional GBP gains would swiftly fade. In contrast, a break of 1.2100 (the previous day’s “strong support” level was 1.2050) would suggest that GBP is not rising much further. A high resistance level at 1.2305 is seen in the distance above 1.2270.

Please click here for the Market News Updates from 12 January, 2023.