USD/CNH is testing its 100-DMA, which....>

CHINA YUAN: USD/CNH is testing its 100-DMA, which kicks in at CNH7.0266 today.

The rate currently sits at CNH7.0271, ~150 pips worse off.

- The selling pressure emerged after the PBoC fix, which was roughly in line

with est. but stronger than on Friday. Weekend comments from U.S. Pres Trump &

Commerce Sec Ross re: progress in phase one of the U.S.-China trade agreement

apply additional weight. Ross echoed his earlier positivity today, saying that

the U.S. and China are "very far along" in finalising this stage of their pact.

- A close below the CNH7.0315-0296 support zone from several earlier lows and

the 100-DMA would reinforce the bearish case after a h&s formation completed in

Oct. Bears already set their sights on the CNH7.0000 figure, followed by the Aug

13 low of CNH6.9908. Bulls look to retake the aforementioned ex-support levels

before targeting CNH7.0572, the 23.6% slide off the Oct 10 peak.

- Points of note in the Chinese calendar this week include Caixin

services/composite PMIs (Tuesday) and trade balance (Friday). CIIE, a major

import fair, kicks off in Shanghai on Tuesday with a keynote speech from Chinese

Pres Xi. Elsewhere, the PBoC will conduct MLF operations on Tuesday.