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CNH
MNI (London) - USD/CNH closed above the well-defined technical uptrend channel on Thursday, marking the first such instance in the current cycle. A light bid for the broader USD and a negative return from a holiday for the Hang Seng index (mainland Chinese markets remained closed) then allowed USD/CNH to register a fresh YtD high in Asia-Pac dealing (CNH7.2286).
- The well-documented, yuan-negative Chinese policy mix deployed in recent weeks, as authorities reportedly mull over strategies to reignite domestic demand, continues to underpin the pair.
- USD/CNH is now on track to lodge a 6th weekly gain in 7 weeks, with the trend only interrupted by last week’s stimulus-related hope (with last Friday’s State Council ultimately disappointing on that front, leaving market participants to focus on July’s Politburo gathering as the most likely event re: the unveiling of meaningful stimulus).
- Beyond today’s high, the next meaningful technical resistance level comes in at the 28 Nov ’22 high (CNH7.2592), with spot a little off best levels but still ~150 pips higher for the session, printing ~CNH7.2110.
- Note that the downtick from best levels in USD/CNH comes even as the broader USD firms to best levels of the day (in broad terms) amid weak Eurozone/UK PMI data.
Fig. 1: USD/CNH
Source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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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