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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EUR
EUR/CNH has been losing altitude since it charted a double top pattern in December, with a subsequent bearish 100-/200-DMA crossover generating some further downside momentum. The last sits +35 pips at CNH7.8611, with bulls hoping that it will snap the current six-day losing streak on a closing basis. Today's uptick occurs as the pair has descended onto the 61.8% retracement of the Nov 18 - Dec 31 rally located at CNH7.8525, struggling to close below that level.
- Weakness showed by the pair at the beginning of the new year seems driven by the EUR side, as USD/CNH has ticked away from multi-year lows over the same period.
- Implied 1-month volatility in EUR/CNH has been sliding since the first days of 2021, reaching worst levels since Nov 3 today.
- The Eurozone awaits the resolution of regional political risks. Over the weekend, Germany's ruling CDU party will elect its new leader and Cll'r Merkel's likely successor. Elsewhere, Italian PM Conte scrambles to find a way to cling onto power after a junior coalition partner left the gov't.
- Should the rate rise past Jan 13 high/50% retracement of the Nov 18 - Dec 31 rally at CNH7.8819/28, bulls would be able to target the 50-DMA, intersecting at CNH7.8898. Conversely, a dip through the aforementioned 61.8% Fibo level at CNH7.8525 and Jan 14 low of CNH7.8345 would confirm bearish dominance.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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