April 30, 2024 02:48 GMT
USD/CNH Testing 50-day EMA Resistance Amid Spot Weakness/Broader Dollar Strength
CNH
USD/CNH has pushed higher, we are back above the 7.2500 level, around 0.1% weaker in CNH terms. Current spot levels (7.2515/20) are very close to the 50-day EMA resistance point, see the chart below.
- Onshore USD/CNY spot has firmed nearly 0.20%, back above 7.2400, bringing it back close to the top end of the daily trading band, albeit still off recent highs.
- Broader USD gains are evident, with the BBDXY up nearly 0.20% at this stage. The local equity backdrop is close to flat, while onshore bond yields are down (more so at the front end). This followed a chunky month end OMO injection earlier.
- The PMI prints suggested a mixed picture, with services activity moderating further but remaining above the expansion/contraction point. Manufacturing painted a resilient picture, particularly in terms of the Caixin result (back to Feb highs). Price gauges also rose.
- The data calendar is quiet until next week when onshore markets return (closed from Wed-Fri this week).
Fig 1: USD/CNH Back Near The 50-day EMA
Source: MNI - Market News/Bloomberg
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