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CNY: USD/CNH Now Only Major Pair to Close NFP Gap

CNY
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USD/CNH now the only major currency pair to have reversed the NFP-inspired USD rally, with the pair now below 7.07 mark to narrow in on the Friday low of 7.0471. This firms the 50-dma as notable resistance on any further rally (today at 7.1128), while 7.0377 marks the first major downside target (50% retracement of upleg off the cycle low at 6.9713.

  • Moves come ahead of the re-opening of trade for Chinese markets this week, with the Hang Seng taking another leg higher overnight, hitting the best level since February 2022 to suggest upside risks for Chinese equities when they re-open.
  • Strength in CNH spot has aided the demand for USD/CNY downside in options space today, with over $3 in USD/CNY puts trading for every $2 in calls. Deep OTM puts have traded in size - with 6.7450 and 6.8300 seeing a cumulative $900mln notional traded across the strikes.
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USD/CNH now the only major currency pair to have reversed the NFP-inspired USD rally, with the pair now below 7.07 mark to narrow in on the Friday low of 7.0471. This firms the 50-dma as notable resistance on any further rally (today at 7.1128), while 7.0377 marks the first major downside target (50% retracement of upleg off the cycle low at 6.9713.

  • Moves come ahead of the re-opening of trade for Chinese markets this week, with the Hang Seng taking another leg higher overnight, hitting the best level since February 2022 to suggest upside risks for Chinese equities when they re-open.
  • Strength in CNH spot has aided the demand for USD/CNY downside in options space today, with over $3 in USD/CNY puts trading for every $2 in calls. Deep OTM puts have traded in size - with 6.7450 and 6.8300 seeing a cumulative $900mln notional traded across the strikes.