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USD/CNH Creeps Higher In Holiday-Thinned Trade

CNH

Spot USD/CNH has added ~35 pips in tight Asia-Pac trade, with mainland China off for holidays through Wednesday. The rate last deals at CNH6.4772.

  • BBG analyst Cranfield argued that the closure of onshore markets may create upward pressure for USD/CNH this week, if traders take their cue from the upswing seen after LNY holidays.
  • Implied USD/CNH 1-month vol has moved away from multi-month lows printed last week and last sits at 3.88%.
  • A break above the 23.6% retracement of the Apr 1 - 29 slide/100-DMA at CNH6.4912/43 would please bulls, while bearish focus falls on CNH6.4614, which limited losses on Apr 29/30.
  • Looking ahead, China's trade balance, BoP current account balance & Caixin Services PMI are due Friday.

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