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

USD/CNH: Solid support is aligned around 6.8400 – UOB

For the time being, more losses in USD/CNH shouldn’t be ruled out, according to UOB Group economists Lee Sue Ann and Quek Ser Leang.

24-hour perspective: “Yesterday, we said that the US Dollar is expected to move lower but is unlikely to breach the support at 6.8700. Our prediction came true as the US Dollar fell to a low of 6.8714 before rising. Although the US Dollar may go below 6.8700 today, the next support, around 6.8560, is unlikely to be in sight. The underlying tone still seems weak. A violation of 6.9000 (a minor resistance level at 6.8900) would signal an easing of the slight downward pressure now present.

Within the next three weeks: “We don’t have anything to add to yesterday’s report” (05 January, spot at 6.8910). As was said, the danger is still negative even if the US Dollar’s slide from last month has eased. The only way to know if the negative pressure has subsided is if the price breaks through 6.9250 (the “strong resistance” mark was at 6.9400 yesterday). However, a drop is anticipated to encounter strong resistance above 6.8400.

USD/JPY is likely to recover to 135.00 – UOB

UOB Group economist Lee Sue Ann and markets strategist Quek Ser Leang provide hints about the likelihood of a rise to the 135.00 zone in the immediate term for the USD/JPY.

View over the last 24 hours: “Our expectation for the USD to trade horizontally was wrong as it climbed to a high of 134.05 before tumbling to settle at 133.40 (+0.59%). The upward momentum has increased. Although the USD may advance further today, it is unlikely to confront the
key barrier of around 135.00. (there is another relatively strong level at 134.50). The upward pressure will remain if the USD does not go below 132.55 (minor support is around 133.00).

Within the next one to three weeks: “We said yesterday (05 January, spot at 132.00) that “downward pressure seems to have abated and USD has likely shifted into a consolidation phase” and that we anticipated USD to “trade between 129.50 and 133.50 for a length of time.” We were surprised by the sudden increase in the USD to 134.05. The price is likely in the early stages of a corrective comeback that might reach 135.00, and upward momentum is increasing. Within the next several days, USD should avoid falling below the “strong support” level, which is now around 131.50, to maintain the momentum.

The EUR/USD is testing the 1.0500 level ahead of crucial data.

The euro trades defensively against the dollar, encouraging EUR/USD to fluctuate around 1.0500 on Friday.

Focusing on US NFP and EMU CPI for EUR/USD.

Following the big decline in the previous session, the EUR/USD probes the area around 1.0500. This is all taking place against the background of the overall consolidation pattern observed in the global markets ahead of significant data releases on both sides of the Atlantic.

On the latter, the US labor market report, Factory Orders, and the ISM Non-Manufacturing will command all the focus in the US data arena later in the European morning. At the same time, advanced inflation estimates in the wider Euroland for December will take center stage.

Earlier on the old continent, in November, retail sales in Germany fell by an annualized 5.9%.

Meanwhile, the German 10-year Bund rates add to Thursday’s modest increase by posting minor increases.

What should I look for in the EUR?

This week, the EUR/USD has encountered some good resistance at 1.0500 despite the return of the buy bias for the dollar. Given the significant data releases anticipated for later in the day, the price movement of the pair will probably be tested.

AUD/USD will continue trading in a range, according to UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group predict that the AUD/USD pair will trade in the area of 0.6660-0.6860 over the following weeks.

“We underlined yesterday that the ‘quick surge looks to be exaggerated and AUD is unlikely to advance further,’ and we anticipated AUD to ‘trade sideways between 0.6770 and 0.6870,'” the 24-hour outlook reads. Instead of fluctuating in price, the Australian dollar plunged to a low of 0.6735 before finishing sharply at 0.6752 (-1.26%). Although the Australian dollar may continue to fall, oversold circumstances indicate that it is unlikely to test the support around 0.6700. (next support is at 0.6660). If 0.6820 (a minor resistance at 0.6790) were broken, it would indicate that the AUD’s weakness has steadied.

Within the next three weeks: “Yesterday (05 January, spot at 0.6825), we emphasized that, despite higher momentum, AUD must break firmly above 0.6900 before a prolonged climb is probable. We said that the possibility of AUD breaking decisively above 0.6900 is now low, but it would be intact if it remained above 0.6735 over the next few days. In NY trading, NY fell sharply and hit a low of 0.6737, just shy of taking out 0.6735. Although 0.6735 isn’t crossed, the rising momentum has slowed. The AUD will probably trade between 0.6660 and 0.6860 for the time being, given the recent price movements, which are probably part of a long consolidation range.

Please click here for the Market News Updates from 5 January, 2023.