In this article, we have covered the highlights of global market news about the USD/TRY, USD/JPY, EUR/GBP and USD/CNH.
USD/TRY Price Analysis: Bulls hit 18.00, ignoring Friday’s Doji, and RSI is overbought.
After a failed effort on Friday, the USD/TRY regains upward momentum as buyers test the 17.95 level early Monday morning in Europe.
As a result, the Turkish lira (TRY) pair disregards the previous day’s Doji, bearish candlestick, and overbought RSI circumstances.
However, an upward rising resistance line from early July, which was at 18.10 at the time of publication, looks to be testing the USD/TRY bulls.
Even if the price climbs over 18.10, the previous annual top in the 18.35-40 range will operate as an extra upward filter before leading buyers to the all-time high, ideally around the 20.00 psychological magnet.
Meanwhile, retracement movements may first target the 10-DMA level around 17.80 before emphasizing June’s top at 17.50.
During the quote’s decline beyond 17.50, the two-month-old prior resistance line, which was at 17.10 by press time, will be key to monitor, as a downward breach of 17.10 might persuade sellers to seize control.
USD/JPY battles to hold onto the 132.00 level as it approaches a one-and-a-half-month low.
The USD/JPY pair finds some support and recovers a few pips from the 132.00 area, or a one-and-a-half-month low reached earlier this week. For the fourth consecutive day, the pair is trading close below the mid-132.00s during the early European session.
The US dollar has been hovering at its lowest level since July 5, and it seems to be a primary factor putting downward pressure on the USD/JPY pair. Fears of an economic collapse overshadowed Friday’s better US Personal Consumption Expenditures (PCE) price index data. This fuels suspicion that the Fed would not hike rates as fast as originally anticipated, serving as a drag on the dollar.
A combination of variables, on the other hand, is expected to enhance demand for the Japanese yen while also contributing to the USD/JPY pair’s decline. The anticipation of the Fed’s less aggressive policy tightening has resulted in a recent decrease in US Treasury bond rates, leading to a narrowing of the US-Japan rate disparity. This, along with a lower risk tone, has pushed flows to the traditional safe-haven JPY.
Analysis of the EUR/GBP price: Bear flag, German Retail Sales tempt sellers below 0.8400
EUR/GBP explains disappointing German Retail Sales for June, as the cross-currency pair trades down at 0.8390 during the first European session on Monday.
As a result, the quotation stays close to the support line of a short-term bearish flag chart pattern, despite a stable RSI (14).
Nonetheless, retail sales in Germany fell 8.8 percent year on year in June, compared to a -8.0 percent market forecast and a -3.6 percent dip the previous month. Before cheering on the EUR/GBP bears, it’s worth remembering that the 0.8380 support confluence, which includes the 50-HMA and the lower line of the flag, has to be validated.
The prior resistance level from July 21, at 0.8350, is also performing as significant support.
Meanwhile, recovery movements may aim for the 100-HMA level at 0.8400 before targeting the stated flag’s upper line, which was at 0.8425 at the time of publication.
If EUR/GBP bulls maintain control over 0.8425, a protracted run-up towards the July 25 swing high at 0.8525 cannot be ruled out. Overall, the EUR/GBP is expected to stay under pressure, although the bears have a difficult road ahead.
USD/CNH: Additional range bound is still possible – UOB
“We said last Friday that ‘the outlook remains mixed,’ and we anticipate US Dollar to trade between 6.7350 and 6.7650.” US dollar then fell rapidly but only momentarily to 6.7267 before recovering to a high of 6.7585. The outlook remains mixed, and the USD is forecast to move sideways today, between 6.7350 and 6.7650.”
“We suggested last Thursday (28 July, spot at 6.7525) that US Dollar is expected to stabilize and trade between 6.7280 and 6.7800.” On Friday, the USD fell momentarily below the bottom of our projected range (low of 6.7267) before quickly recovering. Short-term prospects are mixed, and we continue to anticipate the US Dollar to stabilize and trade between 6.7280 and 6.7800 for the time being.”
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