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USD/CNH Pops Higher Amid Thinner Liquidity

CHINA YUAN

Spot USD/CNH has crept higher and last trades +88 pips at CNH6.7434, with China enjoying the last day of holidays. Little to drive the move on headline feeds, with lower liquidity likely playing a role here. U.S. Vice-Presidential candidates touched upon relations with China during their debate, but didn't really say anything shocking, with Sen. Harris accusing the Trump administration of losing a trade war with Beijing & current Vice Pres Pence blaming China for the coronavirus pandemic.

  • A clearance of Oct 2 high of CNH6.7781 would clear the way to Sep 24 high of CNH6.8462, a key near-term resistance. Bears look for a drop through Oct 5 low of CNH6.7136, which would shift focus to CNH6.68-67 area, which cushioned losses when the rate charted a triple bottom pattern back in 2019.
  • China's Caixin Services & Composite PMIs are due tomorrow.

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