USD/CNH Has Brief Look Above 7.29 On Latest RRR Cut

MNI (London) - The PBoC has delivered the latest 25bp RRR cut.

• The move was perhaps a little ahead of wider expectations timing wise, although not a complete surprise, with some calling for more immediate action.
• There was plenty of speculation re: a RRR cut in Q4 evident, including comments covered by state-run media outlets.
• USD/CNH sees a limited uptick, briefly showing above CNH7.2900, before settling around CNH7.2850.
• A reminder that Asia-Pac hours saw RTRS sources note that PBOC window guidance “has asked some of the country's biggest lenders to refrain from immediately squaring their FX positions for a while in order to alleviate downside pressure on the yuan.”
• Thursday also saw various state-run media outlets reiterate that the PBoC has the means to keep the yuan basically stable. A line that the PBoC once again deployed alongside the RRR cut.
• A low of CNH7.2610 was seen in Asia.
• Technically, trend conditions remain bullish and the move lower in recent sessions appears to be a correction, key short-term support in USD/CNH lies at CNH7.2392, the Sep 1 low.
• For bulls, a break of resistance at CNH7.3682, the Sep 8 high, would resume the uptrend and this would open CNH7.3749, the Oct 25 high - a major resistance and the all-time high.