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USD/CNH has turned its tail ahead of.....>

CHINA YUAN
CHINA YUAN: USD/CNH has turned its tail ahead of the 100-DMA & continues to test
the psychological CNH7.0 level to the downside; last trades -132 pips at
CNH7.0008. The yuan draws support from PBoC action, as China's central bank
fixed its USD/CNY mid-point at fixed at CNY6.9779. We haven't seen the PBoC lean
against CNY weakness to that degree since Oct.
- Apart from propping up the yuan, the PBoC resumed its liquidity injections &
there is suspicion of potential activity from the "national team," which
resulted in a dynamic rebound in Chinese equity benchmarks.
- Today's PBoC action is an extension of yesterday's attempts to soothe Chinese
post-LNY market rout, driven by coronavirus concerns. On Monday BBG reported
that China hopes that the U.S. will agree to some flexibility on Beijing's
commitments in phase-one trade deal amid the virus crisis. USD/CNH rallied past
CNH7.0 yesterday, topping out just shy of the 100-DMA at CNH7.0240.
- Bears look forward to the CNH7.0 mark giving way. It would return their focus
to the 200-DMA at CNH6.9892 & the 50-DMA at CNH6.9760. Bulls need a rebound
through the aforementioned 100-DMA to gain a fresh impetus.

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