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CNH: USD/CNH At Session Highs, But Still Sub 20 & 50-day EMA Resistance

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USD/CNH tracks at 7.2800 in latest dealings, very close to session highs (7.2803). This still leaves us just under the 50-day EMA (near 7.2835/40), while highs over the past week have been close to 7.3000 (which the 20-day EMA resistance point is close to). 

  • CNH has dipped around 0.35% so far today, in line with broader USD index gains, although outperforming most of the G10, with yen, EUR and AUD and NZD all off by 0.50% or more.
  • There is no onshore anchor point for USD/CNH, given onshore markets have started the LNY break period (returning next Wednesday).
  • Broader USD gains have been fueled by fresh Trump tariff headlines, although fresh direct threats against China don't appear evident so far. Earlier remarks from Trump stated he wanted a much higher universal tariff rate than 2.5% (which according to the FT is what incoming Treasury Secretary Bessent is pushing for as an initial step on tariffs, before rising gradually).
  • USD/CNH implied vols re slightly firmer, but the 1 month at 5.40%, is still comfortably sub pre-inauguration levels (above 6%). The 1 month risk reversal is also sitting off pre-inauguration highs, last slightly back from flat, at -0.21. 
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USD/CNH tracks at 7.2800 in latest dealings, very close to session highs (7.2803). This still leaves us just under the 50-day EMA (near 7.2835/40), while highs over the past week have been close to 7.3000 (which the 20-day EMA resistance point is close to). 

  • CNH has dipped around 0.35% so far today, in line with broader USD index gains, although outperforming most of the G10, with yen, EUR and AUD and NZD all off by 0.50% or more.
  • There is no onshore anchor point for USD/CNH, given onshore markets have started the LNY break period (returning next Wednesday).
  • Broader USD gains have been fueled by fresh Trump tariff headlines, although fresh direct threats against China don't appear evident so far. Earlier remarks from Trump stated he wanted a much higher universal tariff rate than 2.5% (which according to the FT is what incoming Treasury Secretary Bessent is pushing for as an initial step on tariffs, before rising gradually).
  • USD/CNH implied vols re slightly firmer, but the 1 month at 5.40%, is still comfortably sub pre-inauguration levels (above 6%). The 1 month risk reversal is also sitting off pre-inauguration highs, last slightly back from flat, at -0.21.