CNY Falling Further
The Chinese Yuan is weakening further across early European trading on Monday. Following the MLF cut we saw last week, the PBoC this week announced an unscheduled reduction in its 1-year and 5-year lending facilities. The Chinese economy has been hard hit this year by fresh sets of lockdowns, the impact of rising global inflation, supply issues and tumbling property prices. With the Q2 GDP having narrowly avoided falling into negative territory, the PBoC is aggressively trying to fuel activity in Q3. With the Fed actively committed to further monetary tightening, the policy divergence between the PBoC and the Fed is keeping USDCNH supported here and looks likely to continue to do so near term.
Technical Views
USDCNH
The rally off the latest test of the bullish trend line support has seen USDCNH testing above the 6.8481 highs. With both MACD and RSI bullish here, the focus is on a continuation higher while price holds above this level, putting 6.90874 in view as the next target for buyers. To the downside, the key support to watch is the 6.7852 level with the rising trend line in that area also.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.