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USD/CNH weakened past yesterday's low....>

CHINA YUAN
CHINA YUAN: USD/CNH weakened past yesterday's low and trades -189 pips at
CNH7.1036 as we type, just above session lows. The PBoC fix drew some attention
as it came after a four-day hiatus caused by public holidays in China. The
central USD/CNY mid-point was set at CNY7.0690, below the BBG median of
CNY7.0717. The previous (pre-holiday) mid-point was fixed at CNY7.0571.
- The CNH7.1 mark has limited losses thus far and bears look for the level to
give way. Below there would open the 50-DMA at CNH7.0612, last tested on Apr 30.
Bulls need a rebound above May 4 high of CNH7.1561 to regain some impetus.
- USD/CNY reopened on the front foot, testing the CNY7.1 mark to the topside, as
onshore markets absorbed news flow from over the long weekend, including
U.S.-China sabre rattling. The rate has eased off since and last trades +259
pips at CNY7.0892. A renewed rally above CNY7.1 would be a welcome development
for bulls, who would be able to target Apr 2 high of CNY7.1281. Bears keep an
eye on Apr 30 low/50-DMA at CNY7.0480/35.
- Caixin Services/Composite PMIs and China's trade balance hit the wires
tomorrow, with flash Q1 BoP current account balance coming up on Friday.
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