USD/CNH sees bears in charge. The rate...>

CHINA YUAN: USD/CNH sees bears in charge. The rate started the week by showing

under the support zone from several recent lows (marked in the chart with a red

line) and breaching the 100-DMA for the first time since May. These developments

occurred after USD/CNH completed a major head and shoulders top through Oct and

severed a longer-term trendline support off the Apr 18 low. The focus is on

CNH7.0000, even as the level may have lost some of its shine after giving way in

Aug. Bears are on the lookout for any signs of weakness in the current sell-off.

- On the data front, a strong Caixin m'fing PMI tally released Friday supported

the yuan, but worth remembering that the latest official m'fing PMI, capturing

large state enterprises, was less than inspiring and remained in contraction.

- Trade headlines remain the key driver, with signals of progress toward a

"phase one deal" taking the spotlight. However, a comprehensive pact remains a

remote possibility amid little appetite for major concessions. Chinese gov't

advisers recently told MNI that Beijing will not cede on some key U.S. demands.

- We will hear from Chinese Pres Xi today as he opens the CIIE fair in Shanghai.

- See chart at: https://emedia.marketnews.com/marketnewsintl/USDCNH05112019.png