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USD/CNH Holds Monday Rebound, Wedged Between 100 & 200-day EMAs

CNH

USD/CNH found selling interest above 7.2200 on Monday's session, while dips post the Asia close to 7.2000 were supported. We track near 7.2140 in early Tuesday dealing, having lost 0.30% in Monday trade. USD/CNY finished up near 7.2100, well off recent highs above 7.2400. A gain in CNY terms of 0.45%.

  • USD/CNY's slump reflected catch up to USD weakness as onshore markets returned for the first time yesterday since last Tuesday. BBG noted that USD dip buying was quite strong though, with state owned banks reportedly selling USDs at various stages of yesterday's session to balance the market.
  • USD/CNH is comfortably above post US NFP lows from Friday (7.1653), the pair wedged between the 200-day EMA (7.1990) and the 100-day EMA (7.2244).
  • The local data calendar just has April FX reserves on tap, which will likely print towards the end of the local session. On Thursday April trade figures are due.
  • In US trade the Golden Dragon index was down slightly. This followed a positive tone from onshore equities as markets returned (the CSI 300 up 1.48%).
  • Also note Shenzhen has eased house buying restrictions (see this BBG link for more details).

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